Strategizing by the government: Can industrial policy create firm-level competitive advantage?


  • Sergio G. Lazzarini

    Corresponding author
    1. Insper Institute of Education and Research, São Paulo, Brazil
    • Correspondence to: Sergio G. Lazzarini, Insper Institute of Education and Research, Rua Quata 300, Sao Paulo, SP 04546-042, Brazil. E-mail:

    Search for more papers by this author


Despite the prevalence of governmental action devised to foster firms and industries, the link between industrial policy (IP) and competitive advantage has received scant attention in strategic management. I propose a model where such a link is mediated by the accumulation and churning of local resources and capabilities. I also introduce the concept of support-adjusted sustainable competitive advantage (SASCA), which occurs if a firm's observed performance is superior to the expected performance of competitors had they received the same array of policies. I argue that achieving SASCA through IP is a difficult endeavor and requires the interplay of three conditions: insertion in global production networks, geographical specificity, and governmental capability. Thus, the model expands the potential determinants of competitive advantage into the context of governmental intervention. Copyright © 2013 John Wiley & Sons, Ltd.