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Implications of learning and doing: On the micro-foundations of trade, industrial organization and development

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  • Y Wan Jr, Henry

Abstract

In discussing the Mill–Bastable doctrine, where under provisos, infant-industry protection may be justifiable to encourage entry against a first mover that lacks inherent advantage, Kemp (1960) noted that if infant-industry protection can block the competition from the foreign first mover, entry by domestic rivals may still inhibit the potential second mover who lacks experience and acquired skill, and asked whether better alternatives exist. Later studies raised more doubts; no provision is made for infant-industry protection under WTO-GATT. This study calls to attention that in fact globalization has brought a better alternative. As explained in Tung and Wan (2011), as first movers, Americans invented the hard disk drive, and then in pilot plants, Singaporean workers gained the production experience to impart that acquired skill into operational menus for mass production by Thais, with their inherent advantage of abundant labor.

Suggested Citation

  • Y Wan Jr, Henry, 2011. "Implications of learning and doing: On the micro-foundations of trade, industrial organization and development," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 1(3), pages 307-320.
    • Handle: RePEc:gok:ijdcv1:v:1:y:2011:i:3:p:307-320
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    File URL: http://www.worldscientific.com/doi/pdf/10.1142/S2010269011000191
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