How public demonstration projects affect the emergence of new industries: an empirical study of electric vehicles in China

Abstract

Public demonstration projects are receiving increasing and often sceptical attention, especially when developing economies attempt to accelerate the emergence of new industries through government intervention. The aim of this paper is to ascertain whether these demonstration policies can promote industrial emergence, at least in China, and to explore the mechanisms of their influence. A survey with 1500 respondents was conducted to investigate China's electric vehicle demonstration project, known as the 'Ten Cities, One Thousand Vehicles' programme. Structural-equation modelling was used to analyse the 437 valid questionnaires returned. The results show that this public demonstration project has improved product information, application and diffusion. In addition, the results validate the use of a model that illustrates the effects of demonstration policies on industrial innovation in terms of the policies' testing and showing functions. The paper offers insight into the use of demonstration policies as a form of intervention to promote industrial emergence, and the results will be of interest to policy makers, industrialists and academics.