Infant industry argument: read the definition of infant industry argument and 8,000+ other financial and investing terms in the nasdaqcom financial glossary. One of the most notable arguments for protection is known as the infant industry argument the argument claims that protection is warranted for small new firms especially in less developed countries new firms have little chance of competing head-to-head with the established firms located in the developed countries. When and how should infant industries be protected the infant industry argument is one of the oldest arguments used to justify the protection of. The infant industry argument (iia), initially devised by alexander hamilton (in 1791) and friedrich list (in 1841) (hoekman, 2001, p 23), is a widely-used concept to justify the protection of young start-up companies against international competition. An infant industry which does not have such natural and other facilities and advantages to grow deserves no protection, as it will be an unnecessary curb on general welfare to impose a burden on the economic waste. More recent studies confirm the failure of infant industry protection see robert e baldwin, “the case against infant-industry tariff protection,” journal of political economy 77, no 3 (may/june 1969): 295-305 anne o krueger and baran tuncer, “an empirical test of the infant industry argument,” american economic review 72, no 5. A test of the infant-industry argument on turkish data, and found no evidence that more protected industries in turkey experienced a higher rate of cost decline than less protected industries, which would be true if trade protection were based on. The infant industry argument is an important justification for tariffs at certain stages in economic development economists and the infant industry argument friedrich list, the national system of political economy (1841) argued that protectionism could be justified for an economy trying to develop new manufacturing industries.
Learning objectives by the end of this section, you will be able to: explain and analyze various arguments that are in support of restricting imports, including the infant industry argument, the anti-dumping argument, the environmental protection argument, the unsafe consumer products argument, and the national interest argument. Dear ota, pleas provide me solution with detailed explanation thanks 1 what is the infant industry argument is it likely to be valid for a. Stages china chinese economic reform (1978) enterprise became more free to set their own goals what is the infant industry argument infant industry. The infant industry argument is an economic reason for protectionism the crux of the argument is that nascent industries often do not have the economies of scale that their older competitors from other countries may have, and thus need to be protected until they can attain similar economies of scale.
Presents a comprehensive exposition of various possible bases for an infant industry argument for protection it distinguishes dynamic internal economies and dynamic external economies and, in the latter case, reciprocal external economies, and externalities resulting from labour training, knowledge diffusion, and atmosphere creation. Learn about arguments that people make against free trade and why these one of the main arguments against free trade is that the infant-industry argument.
The infant industry argument is by far the oldest economic argument for government intervention according to this argument, many developing countries. By the end of this section, you will be able to: explain and analyze various arguments that are in support of restricting imports, including the infant industry argument, the anti-dumping argument, the environmental protection argument, the unsafe consumer products argument, and the national interest argument. 1 introduction the infant industry argument is one of the oldest arguments used to justify the protection of industries from international trade.
Sergio arboleda university international trading karen estefany enriquez is china using the infant industry argument. Infant industry argument definition protectionist reasoning that industrial startups need safeguards against established foreign manufacturers and cutthroat competitors, especially in developing economies this protection is commonly sought by enacting high import duties and/or import quotas.
The case for protecting infant industries if the infant-industry argument is going to become widely accepted, it will need a lot more evidence. The infant-industry theory argues that emerging domestic industries need protection against international competition until they become mature and stable.
World economy infant industry argument 2 expensive for southerners while the north reaped the gains through an increase in jobs and industrial capability. Infant industry argument refers to an argument in favor of protecting the domestic industries through government backing, help, and intervention. The infant industry argument, while obviously correct in theory when appropriate externalities and dynamic effects are assumed, has been badly misused in practice in large part, this was due to the inability to associate theory with ex ante empirically identifiable conditions. Seminar paper from the year 2012 in the subject economics - international economic relations, hamburg university of applied sciences, course: international economics, language: english, abstract: “even if a domestic industry will, within some years, have a cost advantage over its foreign competitors, when the industry is young its costs will. Arguments for and against protectionist policy infant mortality in iraq the infant industry argument is that new industries need protection until they. The infant industry argument is an economic rationale for trade protectionism the core of the argument is that nascent industries often do not have the economies of scale that their older competitors from other countries may have, and thus need to be protected until they can attain similar economies of scale.
Infant industry and political economy of the infant-industry argument the infant-industry consideration is relative to other determinants in the political. The pros and cons of protectionism this is not an economic argument countries is the so-called infant industry argument. The infant industry argument is said to be an economic argument that favors a protectionist approach to trade the basic argument is that when an industry. I've been corresponding with a reader (r nelson) who says he once was a fervent free trader but has now lost the faith.