Abstract: Under the strategic guidance of regional coordinated development, region-oriented policies serve as a proactive response to the imbalance in regional development and a significant pathway to promote high-quality economic growth in specific areas. This study investigates the impact of China’s Northeast Revitalization Strategy on firms’ productivity, analyzing its dual mechanisms of industrial agglomeration and market selection effects. Theoretically, we construct a model of “agglomeration-selection effects” under the influence of regional policies. Empirically, we employ the “unconditional distribution characteristics-parameter correspondence” method and the difference-in-differences estimation to test the selection and agglomeration effects of the revitalization strategy on enterprises’ productivity. The findings reveal: (1) The policy overall distorts the agglomeration and selection effects in Northeast China, manifesting as negative homogeneous agglomeration effects, positive heterogeneous agglomeration effects, and selection effects, thereby lowering the average regional productivity, widening the productivity gap between high and low-efficiency enterprises, and leading to more low-efficiency enterprises exiting the market. (2) The exit behavior of state-owned low-efficiency enterprises is not significant, and the policy’s negative impact on the productivity of pilot industries is more pronounced. With the subsequent introduction of revitalization strategy opinions, enterprise productivity in Northeast China improved after 2009, mitigating the inefficiencies caused by early policy biases. The dynamic effects test, quantile regression, and Probit model estimations under the difference-in-differences approach are consistent with these conclusions. (3) Mechanism tests show that the first round of Northeast Revitalization significantly reduced innovation investment in high-efficiency enterprises but increased their fixed asset and labor inputs, while low-efficiency enterprises saw reductions in both innovation and other factor inputs. This paper’s evaluation of the first round of Northeast Revitalization Strategy provides theoretical and empirical insights for policy formulation in the comprehensive revitalization of Northeast China in the new era.

Key words: regional-oriented policies, ADS model, agglomeration effect, selection effect