The recent revival of industrial policy has generated a renewed demand to evaluate their impacts. Firm-to-firm transaction data offer new possibilities to evaluate industrial policies in general, and policy spillovers in particular. This paper reviews the current state of policy analysis using firm-to-firm transaction data. It argues that value-added tax (VAT) data are the preferred option for studying policy spillovers across a range of policies. The paper then lists gaps in the literature which the OECD could address in future research. The paper shows how transaction data allow one to causally identify the spillovers from industrial policies, or any policy with expected positive spillovers between connected firms. The paper then turns to the emerging evidence on supply chain resilience and discusses how transaction data is best placed to evaluate policies to attenuate these negative spillovers. Finally, the paper shows how transaction data may complement the literature on pro-productivity policies.
Transaction data for evidence-based industrial policy
