Policies Facilitating Firm Adjustment to Globalization
The authors focus on policies facilitating firm adjustment to globalization. They briefly review the effects of trade and investment liberalization on firms, focusing on within-industry effects. They postulate that governments' role in support...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/11/5436091/policies-facilitating-firm-adjustment-globalization http://hdl.handle.net/10986/14219 |
| Summary: | The authors focus on policies
facilitating firm adjustment to globalization. They briefly
review the effects of trade and investment liberalization on
firms, focusing on within-industry effects. They postulate
that governments' role in supporting the process is to
(1) ensure that firms face "right" incentives to
adjust, and (2) intervene in areas where market failures are
present. Their main message 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.
Proactive 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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