Abstract:     Promoting the market-oriented transformation of industrial policies is an inevitable path to achieve the high-quality development of China′s economy in the new era, and the study of the impact on the allocation of factor resources has become a key focus of evaluating the economic effects of selective industrial policies. In response to the problem of insufficient attention to macro effects and limited expansion of effectiveness boundaries caused by the relatively fixed abstract variables of policy behavior in existing research, this paper empirically tested the mechanism and effect of selective industrial policies on resource misallocation based on quasi-natural experiments in national industrial transfer and undertaking demonstration zones using a multi-period DID model, and deeply explored its impact on economic geographic spatial distance heterogeneity. The research has found that: (1) the establishment of national level industrial transfer and undertaking demonstration zones will exacerbate the mismatch of labor resources, while the impact on capital mismatch is not significant; (2) Establishing industrial transfer demonstration zones can effectively alleviate the mismatch of labor resources in the eastern region, but it will exacerbate the mismatch of labor resources in the central region. Currently, the impact on the allocation of labor resources in the western region is not significant; (3) The crowding effect of "true crowding and false agglomeration", increased pressure on government growth, and imbalanced supply and demand in factor markets are the main mechanisms through which policies distort the allocation of labor resources; (4) The mismatch effect of labor resources in areas with accessible transportation, slow population growth, and small urban scales is significant, while being closer to large ports and cities will weaken the mismatch effect of selective industrial policies. The research conclusion of this paper will help to further clarify the deep-seated impact mechanism of selective industrial policies on factor resource allocation, and provide useful practical insights for the government to improve the implementation performance of industrial policies and empower high-quality economic development.

Key words:  selective industrial policy, national level industrial transfer demonstration zone, mismatch effect of labor resources, government intervention