Does Input Sector Liberalization Promote Quality Innovation and Exports?
AbstractThis paper examines the relationship between input sector liberalization and product quality innovation and export orientation by a LDC firm given the complementarity between high input quality and high product quality. We show that input sector liberalization per se may not induce quality innovation and outward orientation. In fact in some situations ceteris paribus input sector liberalization may increase the odds in favour of low quality production. We show that total output sector liberalization, or surprisingly, a suitable degree of output sector protection then is needed to be combined with input sector liberalization so that quality innovation is induced.
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Date of creation: 11 Aug 2004
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Input sector liberalization; Product quality innovation; Export Orientation.;
Other versions of this item:
- Bandyopadhyay, Swapnendu & Acharyya, Rajat, 2006. "Does input sector liberalization promote quality innovation and exports?," International Review of Economics & Finance, Elsevier, vol. 15(4), pages 443-462.
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-10-30 (All new papers)
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