Purpose　The　purpose　of　this　study　is　to　find　the　relationships　among　the　high-　and　new-technology　enterprise　(HNTE)　identification　policy,　firm＇s　total　factor　productivity　(TFP)　and　the　marketization　process　by　using　data　obtained　from　China　manufacturing　firms.　Design/methodology/approach　Propensity　matching　score　-　difference-in-difference　modeling　are　used　to　investigate　the　relationships　among　the　HNTE　identification　policy,　firm＇s　TFP　and　the　marketization　process.　In　addition,　the　complex　relations　between　policy　and　firm＇s　TFP,　including　in　the　proposed　model,　are　assessed　in　detail　through　the　mediation　analysis.　Findings　The　results　show　that　the　HNTE　identification　policy　can　promote　firm＇s　TFP,　but　its　effect　depends　on　the　marketization　process.　The　transmission　path　of　HNTE　identification　policy　to　promote　enterprise　productivity　lies　in　the　optimization　of　incentive　mechanism,　including　the　improvement　of　enterprise　labor　productivity,　the　reduction　of　income　tax　burden　and　cost　and　the　reduction　of　financing　constraints.　In　industries　and　regions　with　more　effective　market　mechanism,　as　well　as　industries　with　more　intense　market　competition,　the　productivity　promotion　effect　of　the　HNTE　identification　policy　is　stronger.　In　industries　and　regions　with　low　degree　of　marketization,　as　well　as　industries　with　low　degree　of　market　competition,　the　productivity　promotion　effect　brought　by　the　improvement　of　incentive　mechanism　is　distorted,　which　actually　inhibit　the　promotion　of　enterprises＇　TFP.　Practical　implications　-　The　study　confirms　that　the　HNTE　identification　policy　plays　an　important　role　in　enhancing　the　TFP　of　China＇s　manufacturing　firm.　Policy　makers　can　adopt　industrial　policy　in　the　key　industries　and　technology　areas　that　are　meaningful　but　market　failure.　Furthermore,　it　demonstrates　that　the　effect　of　the　HNTE　identification　policy　largely　depends　on　the　marketization　process.　These　finding　imply　that　when　formulating　an　industrial　policy,　the　marketization　process　of　the　industry　and　region　should　be　taken　into　account.　Originality/value　The　paper　analyzes　the　relationship　among　the　HNTE　identification　policy,　firm＇s　TFP　and　the　marketization　process.　Panel　data　are　used　to　discuss　the　mechanism　of　HNTE　identification　policy　affecting　firm＇s　TFP.　The　paper　also　reveals　the　effect　of　the　marketization　process　on　the　effectiveness　of　the　HNTE　identification　policy.