Econ 4450 (2010) Note 7 - Econ 4450 Note 7 1 Case 2 How...

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Econ 4450 Note 7 1
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Case 2 How Japan launched the synthetic fiber industry after WWII. Much appears counter-intuitive – 1. An industry to be promoted arose by restricted entry 2. Market force was utilized later, but not in the beginning 3. There is externality, but the question is not more or less (output) but all or none. 2
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A synopsis of the chapter by Suzuki in Miyajima,. Kikkawa, and Hikino, (eds.), Policies for Competitiveness , Oxford. Post-World War II Japan needed artificial fiber for clothing, fishnet to harvest seafood, and exports to nearby lands for foreign exchange. Private firms were deterred by the costly and risky process, to introduce the technical information available to competitors. The government could not afford a public firm for the task like in Meiji days. By consensus, the cost in introducing the technology was to be financed by the large Japanese market. The firm Toray was designated as the pioneer – temporary monopolist, with other firms entering on schedule 3
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This note was uploaded on 04/29/2010 for the course ECON 4450 taught by Professor Wan during the Spring '09 term at Cornell University (Engineering School).

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Econ 4450 (2010) Note 7 - Econ 4450 Note 7 1 Case 2 How...

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