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Industrial Policy for National Champions

Edited by Oliver Falck, Christian Gollier, and Ludger Woessmann

Publication Year: 2011

Prominent economists present the pros and cons of government’s subsidizing or protecting firms that are “national champions.”

Published by: The MIT Press

Series: CESifo Seminar Series


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Title Page, Copyright Page

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pp. v-vi

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Series Foreword

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pp. vii-viii

This book is part of the CESifo Seminar Series. The series aims to cover topical policy issues in economics from a largely European perspective. The books in this series are the products of the papers and intensive debates that took place during the seminars hosted by CESifo, ...

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pp. ix-x

Initial versions of the contributions collected in this volume were fi rst presented at the conference on “ Do We Need National or European Champions? ” at CESifo in Munich, Germany, in November 2007. The conference was part of the project “ How to Construct Europe, ” funded by the German Leibniz Association, ...


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pp. xi-xii

Part I: Introduction

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1. Arguments for and against Policies to Promote National Champions

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pp. 3-10

Governments around the world, and particularly within the European Union, are deeply divided about the proper role of industrial policy, with preferences ranging from neoliberal approaches to strong government support for national champions. Some politicians argue that hands-off governance facilitates the sellout of national economies, ...

Part II: Analyses in Dynamic Settings

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2. Some Thoughts on Industrial Policy and Growth

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pp. 13-30

In the aftermath of WWII, many developing countries have opted for policies aimed at promoting new infant industries or at protecting local traditional activities from competition by products from more advanced countries. Thus several Latin American countries advocated import substitution policies, whereby local industries would more fully benefit from domestic demand. ...

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3. National Champions and Economic Growth

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pp. 31-62

Schumpeter’s (1912, 1942) view that economic growth arises through an ongoing process of creative destruction, as developed in the New Endogenous Growth Theory of, for example, Aghion and Howitt (1998), is increasingly solidly validated by empirical work. ...

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4. Subsidizing National Champions

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pp. 63-88

One mission of the EU Lisbon Strategy is to make Europe “ the most competitive and dynamic knowledge-based economic region in the world. ” Although there are many different ways to reach this goal, the idea of an industrial policy that promotes European or national champions as the best way to compete in a globalized world ...

Part III: Political-Economy Analyses

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5. Mergers and National Champions

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pp. 91-118

In recent years a number of mergers (sometimes between firms located in the same country, sometimes between firms located in different countries) have attracted a lot of media attention because of alleged protectionist positions taken by politicians and authorities of the countries that in one way or another have been involved in such mergers. ...

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6. The Hidden Costs of Political Sponsorship of Industrial Firms

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pp. 119-132

When in the spring of 2005 the Airbus A380 made its maiden flight, there was an upsurge of enthusiasm in Europe about the Airbus project as a testimony to the virtues of publicly supported, internationally collaborative industrial policy. This enthusiasm was not confined to France, but it found particularly heady expression there: ...

Part IV: Analyses in Static Settings

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7. National Champions under Credit Rationing

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pp. 135-154

Oligopoly pricing yields a deadweight loss for society. The policy implication is to maintain competitive market conditions, providing the rationale for strong European laws which have been implemented to prohibit national governments from protecting national firms. ...

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8. Market Integration with Regulated National Champions

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pp. 155-176

Historically monopoly regulation has been a response to market failures, such as increasing returns to scale and externalities. In most countries government intervention took the form of the creation of public monopolies. More recently the poor performance of public enterprises has motivated widespread reforms ...

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9. Economic Patriotism, Foreign Takeovers, and National Champions

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pp. 177-198

In a recent paper Suedekum (2010) argued that globalization may buttress government aversion toward attempts of foreign corporations to acquire large domestic firms. In his model the government recognizes the positive aspects of cross-border mergers, particularly for domestic consumers who benefit from cost reductions due to merger synergy effects. ...


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pp. 199-206

E-ISBN-13: 9780262298650
Print-ISBN-13: 9780262016018

Page Count: 224
Publication Year: 2011

Series Title: CESifo Seminar Series
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OCLC Number: 750173489
MUSE Marc Record: Download for Industrial Policy for National Champions

Research Areas


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Subject Headings

  • Industrial policy -- European Union countries.
  • Europe -- Economic integration.
  • Business and politics -- European Union countries.
  • Competition, Unfair -- Europe.
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