Infant Industry Research Articles

When do petrostates diversify their exports? Urgency, interests, and policy design in Egypt, Kazakhstan, and Malaysia

AbstractMotivationThe need to diversify their economies is an enduring challenge for fossil fuel‐dependent countries, one which will become ever more important as the world seeks to decarbonize. But the conditions under which major oil‐producing countries (petrostates) seek to diversify their exports—and those under which their attempts succeed—are poorly understood.PurposeThis article tests competing explanations for the successes and failures of petrostates' export diversification.Methods and approachWe employ a comparative case study approach using qualitative evidence from two comparatively successful diversification cases—Egypt and Malaysia—and one less successful case—Kazakhstan—selected using a Theil index of export concentration.FindingsThe evidence indicates that Egypt and Malaysia's more successful outcomes stemmed more from necessity and policy design than from differences in domestic institutions and interests. All three countries were motivated to diversify by price volatility and declining revenues at various points from the 1980s to the 2000s and beyond, but reserve depletion was a greater threat in Egypt and Malaysia. As such, they adopted a more balanced approached to diversification, one that combined liberalization with state intervention.Policy implicationsThese cases suggest that petrostates may be willing and able to diversify as the global shift toward renewables raises the prospect of unburnable oil reserves. Petrostates can diversify efficiently by using a basket of policies that includes a mix of economic liberalization and government intervention to create investment and incentives in non‐oil tradeable sectors and nurture infant industries. Opposition to reforms in petrostates can be addressed by selectively compensating vested interests.

Ecological Examination of Mortality Rate in an Infant Industry: The Roles of Legitimacy and Illegitimacy

Population ecologists have sidestepped infant industries. Moreover, prior examinations have overlooked the level issue of legitimacy and the role of illegitimacy in firm failure. We suggest that both legitimacy and illegitimacy are potent antecedents of firm failures in an infant industry. We separate industry-level legitimacy from firm-level legitimacy and propose a novel “one-stage model.” This model indicates that incumbents of the infant industry concurrently take actions to advertise their typical and atypical firm features to industry spectators. These actions not only elevate both the industry-level legitimacy of the infant industry and the firm-level legitimacy of the incumbents but also simultaneously incite competition among the incumbents. We used a manually collected database of news articles on Chinese bicycle-sharing companies to examine firm failures in this infant industry from 2014 to 2017. We found that at the industry level, while industry-level legitimacy reduces a firm’s mortality, industry-level illegitimacy elevates the firm’s mortality. At the firm level, we confirm both the detrimental and beneficial effects of interfirm competition. When the rivals of the focal firm tout their atypical firm features, the focal firm’s likelihood of failure increases; when rivals and focal firm try to highlight their typical firm features, the focal firm’s failure rate decreases. When it comes to firm-level illegitimacy, both the focal firm and its rivals’ illegitimacies increase a firm’s mortality. We confirm that legitimacy and illegitimacy are not two poles of a single continuum.

A Study of Global Trade War and Its Impact on Indian Economy

A Study of Global Trade War and Its Impact on Indian Economy

Positioning Nigeria as a First World Economy in the Era of Signing the African Continental Free Trade Area (AFCFTA)

The challenging circumstances of Nigerian businesses within the African continental free trade agreement has not really placed Nigerian economy at the desired global height as expected. The challenges in line with the ex post facto result of our study showed that, Nigerian was prepared to be launched at the global business circle but are still confronted with specific issues due to lack of proper African continental integration. Our report also showed that, Nigerian capital and financial markets are robust to leverage AfCFTA to boost trade and commerce, attract FDI, utilized our abundance natural and human resources and increase exports. It was however, recommended that: A special purpose vehicle should be created to monitor the progress of the AfCFTA strategies in each of the Member countries. Also, Nigerian government should work harmoniously with stakeholders to ensure trade liberalization especially export sector and start up so as to boost local production; trade Concessions should be given to infant industries, and laws should be made to protect SMEs from foreign and giant competitions; ease of doing business policies should be improved to attract foreign direct investment, FPI and capital inflows. Keywords: Globalization, AfCFTA, International trade, Trade balance, Classical & Neoclassical trade theories.

An Exploration of the Driving Factors Behind Trade Protectionism

Given the thought experiment of David Friedman questioning the legitimacy of protectionism of international trade, this paper provides several determining factors contributing to protectionism in different dimensions: the profusion of infant industries lack the capability of achieving economics of scale, failing to compete directly with foreign mature sectors; indirect tax revenue like tariff could provide an extra fund for local government, and salvage of declining industries guarantees employment rate; and imposing protection policies could also be deems as unavoidable strategy when there is a politic competition. Overall, this paper outlines different logic reasonings behind the imposition of international trade protectionism policy. It is concluded that even though imposing international trade protectionist policy has detrimental impacts on both sides, there are still a bunch of ones exist served for political purposes other than economic considerations in the forms of trade war, high tariffs and certain quota , science and technology sanctions, etc.

Brevíssima história da teoria do desenvolvimento. De Schumpeter e Prebisch ao novo desenvolvimentismo

ABSTRACT Classical developmentalism was heterodox economics that showed countries require a moderate intervention of the state in the economy to industrialize and catch up. Growth depends on investments and on a satisfying expected rate of profit, which import tariffs legitimized by the infant industry argument assure. Latin American countries adopted this industrial policy from the 1950s and experienced high growth rates. But the infant argument loses validity with time. In the 1980s, under the pressure of the Global North, Latin American countries adopted the neoliberal reforms, and are quasi-stagnant since then. New developmentalism emerged in the 2000s, made the critique of conventional economics, proposed a new growth strategy focused on a competitive exchange rate, and legitimized the use of import tariffs with the Dutch disease argument.

INDUSTRIAL POLICY IN ASIAN NEWLY INDUSTRIALIZED COUNTRIES: CONTROVERSIES, REVIEW AND LESSONS

The paper’s aim is to use the successful example of the newly industrialized Asian countries, as well as the countries of the East Asian region in general, to prove the need to implement industrial policy in many countries, both those lagging behind in industrial development and those that have reached the technological frontier. The paper describes the evolution of industrial policy in these countries and what distinguishes them from other developing countries that were unsuccessful in its implementation: the developmental state, which recognized timely the turning point from the strategy of import substitution to the strategy of export promotion, implemented both strategies simultaneously, picked winners, provided support to infant industries through selective interventions, but also disciplined the recipients of its support, tracked its own comparative advantages and anticipated their changes, with a strong synergy between the state and private sectors, and looking at Japan as a model of industrial development, i.e. the lead goose. Industrial policy is one of the most controversial issues in economics. There has been a long debate between two schools of thought - orthodoxy and heterodoxy - as to whether there is a need for industrial policy in general, as well as the role of the state in the process of its creation and implementation, as opposed to the free market model of development in which there is no place for industrial policy, and if it appears it can be only of a general nature, and by no means in the form of selective interventions. Over the last 10 to 15 years, there has been a revision both at the academic level and in the real world that has made industrial policy more acceptable, and thus the debate about it has become less ideologically colored and more pragmatic and nuanced. At the theoretical level, the market fundamentalist view of little theoretical justification for industrial policy has lost its dominance. Despite maintaining neoliberal orthodoxy as the advice of international financial institutions in the process of creating economic policy in developing countries, industrial policy remained important for the promotion of industrial development, especially the infant industries. It is accepted that there are many types of market failures that must be addressed through industrial policy. It is increasingly recognized that industrial policy is not just a highly idiosyncratic practice associated only with the miracle economies of East Asia, but what most of today’s developed countries used when they were in the position of the catching-up countries. As a conclusion, the paper discusses the possibility of transferring the East Asian model to other countries, and sheds light on the determinants of industrial policy success and failure. The key conclusion is that there is room for successful industrial policy even in countries that have reached the technological frontier and want to push it further, as well as in countries lagging behind in industrial development, although the global context in which industrial policy is situated has changed over time. A special commentary is referred to the economic and industrial development of the former countries of Yugoslavia.

Affordance-led framework of understanding of BIM adoption

PurposeSuccessful adoption of building information modelling (BIM) by early adopters is crucial for its effective diffusion. The purpose of this study is to develop a framework of understanding that supports contextualized understanding of BIM adoption decisions in a BIM infant industry. The framework bridges the gap in current knowledge in terms of the absence of such a framework, which has hindered the structured understanding of the BIM decision of an adopter, curtailing the appropriate strategizing of their BIM adoption.Design/methodology/approachThe study focuses on a BIM infant industry, where early adopters begin using BIM, allowing insights into this crucial initial stage of adoption. Identifying affordances as a versatile concept that could effectively represent not only what an adopter perceives and expects from BIM implementation, but also, what the adopter, in fact, can achieve from it, an affordance-led framework of understanding (AFU) was developed to comprehensively capture varying dynamics of BIM decision process. The study took a qualitative retroductive approach to theory with semi-structured interviews to gather necessary data from a sample of BIM adopters purposively selected to maximize the breadth and depth of data.FindingsThe study concludes by identifying and defining pertinent affordances as a new concept and a compulsory state for BIM adoption. Findings further demonstrate that existing theories can be linked to the AFU to strategically direct the affordances dynamics towards the pertinent state.Originality/valueThe AFU enables a deeper contextualizable view of innovation adoption that was absent in existing innovation studies. It significantly enhances the precision of strategizing BIM adoption compared to previous approaches, enabling adopters to plan and implement BIM in a manner that aligns well with their expectations and specific conditions.

DINAMIKA PERDAGANGAN DAN ADAPTASI STRATEGIS: RESPON KOREA SELATAN TERHADAP PEMBATASAN IMPOR SEMIKONDUKTOR JEPANG, 2019-2021

The semiconductor sector, pivotal in the global value chain, sees countries like South Korea carving specializations. Notably, South Korea leads in semiconductor memory but relies heavily on Japanese imports, causing significant trade deficits. This dependency became problematic when historical tensions spurred Japan's export restrictions to South Korea, threatening the semiconductor supply chain and bilateral relations. Addressing this between 2019-2021, South Korea invoked Friedrich List's productive power theory, strategizing via infant industry nurturing and forced capital infusion. They launched the K-Semiconductor Strategy, promoting domestic growth to counterbalance import reliance. This proactive stance attracted 510 trillion KRW in investments, including private, foreign, and government subsidies, bolstering the local semiconductor materials sector. The outcome was twofold: reduced import dependence and a demonstration of South Korea's productive power, affirming its capability to sustain and fortify its semiconductor stronghold despite geopolitical strains. This period underscored the criticality of self-reliant industrial advancement in the face of international dynamics and supply vulnerabilities.

Cashew processing in Ghana – A case for infant industry support?

West Africa produces almost half of the world's cashew nuts. With the domestic cashew processing industry still in its infancy, however, most of it is exported as raw material and processed in India and Vietnam. In Ghana, this is provoking discussions about market interventions to support domestic processing. Since different price policies have diverging implications for farmers and processors, the choice of the policy instrument leads to conflicts of interest between the two groups. In this study, we analyse the short- and long-term economic impacts of enhancing cashew processing through (i.) a temporary export tax on raw cashew nuts, (ii.) a temporary subsidy to cashew processors, and (iii.)a temporary export tax on raw cashew nuts, with government revenues passed on to cashew growers. For this purpose, we develop a partial equilibrium model for the Ghanaian cashew market including the processing from raw cashew nuts to kernels. We find that in the short run, all price policies lead to a substantial increase in processing at the expense of net welfare. We argue, however, that the sector may experience productivity gains through learning by doing and thus, after price policies are phased out, stick to its increased level of output such that short-term welfare losses could be recouped. Therefore, temporarily introduced price policies could help the infant cashew processing industry to grow up, promote the development of the domestic cashew sector, and be welfare-enhancing in the long run. A subsidy to processors is the most appropriate option to achieve this.

Analysis of Strategy Determination for Increasing the Competitiveness of the Active Pharmaceutical Ingridients Industry in Indonesia

The active pharmaceutical ingiridients industry is an infant industry in Indonesia. Efforts to carry out development have been made but have not been able to achieve the expected competitiveness so far. It is realized that competitiveness is an important part that can encourage the development of the active pharmaceutical ingiridients industry, so it is important to develop a useful strategy to develop the industry as expected. The formulation of the strategy is based on the statements of 16 experts who have experience in the pharmaceutical field in Indonesia. The analytical method used is descriptive qualitative analysis. The final results show that the government plays an important role in encouraging industrial development and increasing its competitiveness, so that it can ultimately encourage other industries.

ENTERING SHANGHAI FREE TRADE ZONE: FROM MALAYSIA’S BUSINESSMEN PERSPECTIVE

China’s Belt and Road Initiative (BRI), introduced in 2013, has been strongly supported by various Free Trade Zones (FTZs). The pilot Shanghai Free Trade Zone (SFTZ) received much attention after a major reform in 2019. Malaysia’s enterprises consist of young and infant industries. Hence, this study has aimed to provide insights into the awareness among Malaysia’s enterprises towards SFTZ. In addition, hidden opportunities and challenges will be discussed in detail and further enlighten the concerns of Malaysian enterprises. A purposive sampling method has been applied to select the participants for the five focus group discussions. The results indicated a gap between government practices and industry players regarding the opportunities, challenges, and prospects in the SFTZ. Malaysia is expected to benefit from the SFTZ through comparative advantages in certain industries, with its talent, and through unique products with intellectual property rights. At the same time, Malaysian businesses have remained constrained by several obstacles, such as lack of information, exit policies and differences in regulations. Although MATRADE has stepped in as a bridge between local and Shanghai enterprises, more is needed to be done.

Industrial policy matters: the co-evolution of economic structure, trade, and FDI in Brazil and Mexico, 2000–2015

The early work by Kuznets and Chenery originally developed the theme that economic development was not simply a synonym for aggregate GDP growth, but entailed qualitative changes in the structures of production, employment, and consumption. Later work in international business and economics explored the co-evolution between FDI and economic structure. We investigate the co-evolution between FDI, economic structure and export structures in the two largest Latin American economies, Brazil and Mexico, over the period 2000–2015. Both initially followed similar development strategies during the import-substitution era. During the liberalization era they followed somewhat different strategies towards maintaining the competitiveness of domestic actors. In addition to the analysis of key indicators, we discuss the role played by industrial policies—or their absence—within Brazil’s and Mexico’s development strategies. Industrial policy instruments, such as infant industry protection, subsidies, tax and financial incentives, as well as performance requirements may be crucial to shift the economic structure in the direction of the desired industries. Tracing the co-evolution between FDI and economic structures, even in the absence of statistical rigour to support causal claims, provides interesting insights for industrial policy in the twenty-first century.

Tarifas de importação: o argumento da neutralização da doença holandesa

ABSTRACT In economics, there is just one argument legitimising import tariffs - the infant industry argument -, but it ceases to be valid as the required learning time ends. This note offers a second argument: the neutralisation of the Dutch disease argument. If the country faces this competitive disadvantage, import tariffs and export subsidies may be a way of circumventing the problem. Many countries that industrialised were only successful because they pragmatically neutralised the disease with import tariffs.

Public-private linkages and the case of asteroid mining

ABSTRACT This paper highlights the role of government in boosting the private space sector and proposes that public-private linkages and state support are critical for the success of private space endeavours, such as the fledgling asteroid mining one. The economics of high costs in tandem with outsized risks, and the long time-horizon for the investment to reap a return, have been big obstacles for companies that want a stake in asteroid resource extraction. Such factors necessitate the state stepping in to share the burden. Government funding, technological help, and the state's underwriting of high-level risks, along with ensuring private property rights, are critical for the viability of the asteroid mining infant industry. This paper shows that without enough government backing, the possibility of success for such an enterprise is compromised, as seen in the dismal outcomes of the asteroid mining companies that emerged in recent times.

The trade effects of the African Continental Free Trade Area: An empirical analysis

AbstractThis study examines the possible effects of the African Continental Free Trade Area (AfCFTA) agreement tariff reduction protocol on intra‐African goods trade using two approaches: trade indices and a gravity model. In both approaches, an attempt to identify the trade‐creation and trade‐diversion effects of the proposed AfCFTA is made. The two approaches combined suggest that the AfCFTA could raise intra‐African exports from the average annual value of US$ 72.7 billion (2015–2017) by about US$ 13.7 billion (by about 19%). For the success of the AfCFTA, the success in political activism needs to be combined with a continental industrial strategy that includes continental protection for infant industries in tandem with this continental liberalisation.

Are trade preferences a Panacea? The export impact of the African growth and Opportunity Act

Does “infant industry” preferential access durably boost exports? Using country-product-year data for 1992–2017 and triple-differences regressions, we show that the African Growth and Opportunity Act (AGOA) enhanced apparel exports of African countries on average. But the impact leveled off after the Multi-Fiber Arrangement unleashed competition from Asian countries. Furthermore, the positive average impact masks regional heterogeneity: East Africa’s late-bloomers offset Southern Africa’s boom-bust pattern. Overall, we find little evidence that preferences durably boosted exports.

The design of the Moon Center based on the female perspective

With the opening of China's three child policy and the continuous development of social economy, China's industrial structure has changed constantly. As a new economic growth point, the maternity and infant industry has become a hot industry in recent years. New service industries such as Moon Sister and Moon Center have developed rapidly. The scientific and comfortable modern moon center is increasingly favored by young women. It is undeniable that the emergence of maternity care institutions has timely met the needs of women for puerperal care today. However, there are always many imperfections in the development of emerging industries at the time of their inception, and the Moon Club entered the mainland market late and is in the initial stage of industrial development. From the actual situation of the few existing Moon Centers, it only meets the immediate needs and hasty response, and fails to fundamentally improve and enhance the reasonable, humanized, scientific planning, design and research of Moon Centers. The space function and design style are not mature enough, and there is no deep concept to support it. It is a superficial form, so women's demand for the existing indoor space of postpartum care center has not been met. Therefore, the interior design of postpartum care center must start to change the original design thinking, no longer simply pursue the excessive exaggeration and blandness in style and decoration, but should design a warm and comfortable interior space that conforms to the consumption psychology and aesthetic psychology of newborn mothers based on emotional needs, especially for the functional care of related nursing spaces and its feasible humanized and emotional design.

Rethinking digital construction: a study of BIM uptake capability in BIM infant construction industries

PurposePractitioners have reported a minimal and non-use of building information modelling (BIM), especially in small and medium-sized organisations and BIM infant construction industries. This development calls for a reappraisal of organisations’ strength in capabilities required for BIM uptake towards the target of global construction digitalisation. This study aims to assess the BIM Level 2 uptake capability of organisations in a BIM infant construction industry and identify the underlying interactions between the capability criteria.Design/methodology/approachThe study used a multivariable analysis of fifteen descriptors identified from the people, process, policy, finance and technology domain. Data collection was done in the BIM infant construction industry in Nigeria. Verification of the descriptors and an evaluation of BIM uptake capability in organisations was done. Seventy-three responses were received within the selected context, and data analysis was done with mean weighting and exploratory factor analysis. Maximum Likelihood extraction and Direct Oblimin rotation were used.FindingsFactor analysis revealed three factors that explained 53.28% of the total variance in the BIM Level 2 uptake capability of construction organisations. The factors are workforce capacity and continuous development, an affinity for innovation and strength in physical and operational facilities.Research limitations/implicationsThis study provides an overarching and insightful discussion on BIM uptake capability and construction digitalisation with evidence from a BIM-infant construction industry.Practical implicationsThe findings of this study are a piece of valuable empirical evidence on Level 2 BIM uptake capability. This empirical situation analysis will inform the advocacy for the advancement of BIM and enhanced utilisation of building information. Evidence on the capability performance of the BIM infant industry has been revealed.Originality/valueThe outcome is expected to stir debate on the preparedness of organisations to further exploit the benefits of BIM in the BIM infant construction industry. Examination of the capability for a particular phase of BIM is scanty in the literature.

The Possible Impacts of Financial Nudging in the Food Infant Industries: Beyond Meat Case Study

The second decade of the XXI century has experienced the development of meat substitutes. The origin of this niche is said to emerge from environmental concerns. One of the market leaders in this infant industry is Beyond Meat company. The study aims to identify the impact of the capital markets and media coverage for an infant industry, such as meat alternatives, on the example of Beyond Meat. A sizeable portion of the investment in this new branch of the food sector came from the capital markets, which expect a return on their investment. The Beyond Meat case suggests that these substantial investments did not bring expected returns, which several factors, such as the post-COVID bear market and lack of demand for meat substitute products, could have caused. Thus, despite awareness campaigns, so far, the company has experienced losses. The development of this market niche acted contrary to what was expected. The market failings correlate with the loss of interest of the retail investors, which was attempted to be measured by this research. As a proxy for the retail investor interest, Google Trends Index was used and compared to the stock prices (a method often described as a Buzz Indicator).