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Policies Facilitating Firm Adjustment to Globalization

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Abstract

This Paper focuses on policies facilitating firm adjustment to globalization. We briefly review the effects of trade and investment liberalization on firms, focusing on within- industry effects. We postulate that governments? role in supporting the process is to: (i) ensure that firms face ?right? incentives to adjust, and (ii) intervene in areas where market failures are present. The main message of the Paper is that while many policies could be adopted to address market failures, they need to be carefully designed and implemented in a stable macroeconomic environment. An institutional infrastructure that supports the functioning of modern markets is most important. Pro-active support policies of whatever stripe should be subject to cost benefit analysis, based on the existence of an identified market failure and monitored for performance and cost effectiveness. Transparency and accountability are critical in ensuring that interventions accomplish their intended objectives rather than being vehicles for rent seeking.

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  • Javorcik, Beata, 2004. "Policies Facilitating Firm Adjustment to Globalization," CEPR Discussion Papers 4692, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:4692
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    Cited by:

    1. Ahmed, Gulzar & Arshad Khan, Muhammad & Afzal, Muhammad, 2015. "Trade Liberalization and Industrial Productivity: Evidence from Pakistan," MPRA Paper 70744, University Library of Munich, Germany, revised 15 Mar 2016.
    2. Ausloos, Marcel & Eskandary, Ali & Kaur, Parmjit & Dhesi, Gurjeet, 2019. "Evidence for Gross Domestic Product growth time delay dependence over Foreign Direct Investment. A time-lag dependent correlation study," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 527(C).
    3. Petrit Gashi, 2014. "Human Capital and Export Decisions: The Case of Small and Medium Enterprises in Kosovo," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 16(2), pages 91-120, December.
    4. Correa, Paulo & Dayoub, Mariam & Francisco, Manuela, 2007. "Identifying supply-side constraints to export performance in Ecuador : an exercise with Investment Climate Survey data," Policy Research Working Paper Series 4179, The World Bank.
    5. Jared Carlberg, 2020. "Vulnerabilities and Benefits of Mega-Scale Agri-Food Processing Facilities in Canada," SPP Briefing Papers, The School of Public Policy, University of Calgary, vol. 13(20), December.
    6. Ghani,Syed Ejaz & Grover,Arti & Kerr,Sari & Kerr,William Robert, 2016. "Will market competition trump gender discrimination in India ?," Policy Research Working Paper Series 7814, The World Bank.
    7. Mark Gehlhar & Anita Regmi & Spyro Stefanou & Barry Zoumas, 2006. "Managing Firm Competitiveness in Global Markets," Working Papers 0714, University of Crete, Department of Economics.

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    More about this item

    Keywords

    Globalization; Adjustment; Government policies;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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