Publication details
Industrial Policy in Relation to Automobile Production after the Founding of Czechoslovakia : A Case of Support for an Emerging Sector
| Authors | |
|---|---|
| Year of publication | 2018 |
| Type | Article in Periodical |
| Magazine / Source | Ekonomický časopis |
| MU Faculty or unit | |
| Citation | |
| Web | článek |
| Keywords | Trade Policy; Infant Industry; protectionism; Czechoslovakian Trade Policy; Automobiles |
| Description | This paper presents an empirical study of infant industry protection of automobile industry in Czechoslovakia (CS) in the 1920s. This economy – today a major car producer – was traditionally strongly specialized in the production and export of light consumer goods. Nevertheless, the policy of protectionism was followed and heavy industry was promoted by strongly protectionist trade policies. Protection of the automobile industry was of key importance in the trade policymaking process and was generally undisputed. As our empirical study shows, the CS automobile industry never become internationally competitive and heavy protectionist measures were a necessary condition for its existence. However, behind the protective wall, the industry was able to develop production capacities, substitute imports of components, and even export to some extent to less demanding traditional markets in Europe. The paper is therefore a contribution to the economic history research of the development of such “strategic” industries in clear contradiction with the concept of comparative advantage and implications of economic theory. As such, it is another example of the rejection of international division of labor which contributed (in the long term) to the fundamental restructuring of the national industrial structure. As in other national economies (e.g. France, Italy, Japan, Korea etc.), this has never been seriously disputed by policymakers, national industry, or the public. |