The Failure of French Industrial Policy


France, for a century, thought of herself as a great industrial nation. This country not only saw a source of prosperity and quality jobs for its citizens but also always considered technological autonomy and industrial power as an attribute of sovereignty. For the classical economist, deindustrialization is a fact of development: the more economies grow and become more sophisticated, the more they produce and consume services, and the more industrial activities migrate to emerging countries. However, in France, the attachment to industry and to an active industrial policy remained strong even as the country gradually embarked on European construction and had to respond to globalization and new technological waves. France has long successfully pursued an industrial policy of major projects. European integration, the ever closer union, the development of regulatory authorities for competition, and state aids led France to dismantle its public intervention apparatus. The introduction of the euro further deprived France of its devaluation power to correct relative competitiveness losses. Thus, France is a pure case of a voluntarist country subjected to the test of globalization intermediated by the European Union whose long-term effects on deindustrialization can be judged.

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    In 2008, according to UNCTAD, for the 15 largest French multinationals, over 60% of their assets and 60% of employment were located outside France. The same year, for the 13 large German multinationals, 46% of total assets were located abroad, 14 points lower than the French multinational.


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Correspondence to Pierre-André Buigues.

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Buigues, PA., Cohen, E. The Failure of French Industrial Policy. J Ind Compet Trade 20, 249–277 (2020).

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  • Public support
  • Business
  • Subsidies
  • Public procurement
  • Competitivity

JEL Classification

  • H25
  • H57
  • L52