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A Note on the Infant Industry Argument
Jung Hur1 & Donghyun Park2
Abstract
In this note, we point out a weakness in the infant industry argument for protectionism by showing that a protected infant industry’s ability to export is not necessarily evidence of its international competitiveness. Economies of scale may render exporting profitable for a protected infant industry even if it fails to achieve international competitiveness.
JEL Codes: F12, F13
Keywords: Infant industry, protectionism, developing country
1. Corresponding Author, Assistant Professor, Department of Economics, Faculty of Arts & Social Sciences, National University of Singapore, Singapore 117570, Tel: (65) 6874–4873, Fax: (65) 6775–2646, E-mail: ecshurj@nus.edu.sg
2. Associate Professor, Economics Division, School of Humanities and Social Sciences, Nanyang Technological University, Singapore 639798
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