Abstract
Industrial policy is a crucial instrument employed by the Chinese government to promote high-quality development of enterprises (HQDE). This study leverages the quasi-natural experiment formed by China's Chain Chief System (CCS) industrial policy, utilizing data from Chinese A-share listed companies during 2017–2022 and a difference-in-differences method to explore the relationships among industrial policy, HQDE, and business-government relations. Our findings indicate that the CCS policy can significantly promotes HQDE, with alleviating financing constraints and reducing agency costs identified as potential channels. Business-government relations play a pivotal role in moderating this positive relationship. Specifically, increases in state-owned equity proportions and geographical proximity between enterprises and government both enhance the promotional effect of CCS policy on HQDE. Furthermore, heterogeneity tests reveal that this promotional effect is more pronounced in state-owned enterprises, firms operating in high-tech industries, and those located in regions with less unfavorable business environments. These findings contribute to advancing debates on the effectiveness of industrial policies and deepens our understanding of the critical role of business-government relations.