The Brazilian Microcomputer Industry: A Case Study on a High-Technology Infant Industry
Luzio, Eduardo Franco
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https://hdl.handle.net/2142/72428
Description
Title
The Brazilian Microcomputer Industry: A Case Study on a High-Technology Infant Industry
Author(s)
Luzio, Eduardo Franco
Issue Date
1994
Doctoral Committee Chair(s)
Baer, Werner W.
Department of Study
Economics
Discipline
Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Economics, General
Political Science, General
Sociology, Industrial and Labor Relations
Abstract
"From 1977 to 1992, Brazil sustained a broad and restrictive protective policy for computer related products. Other countries, such as England, Germany, India, Japan and Korea, also adopted infant industry policies for computers, but the Brazilian strategy stood out for the scope of the policy and its strong opposition to foreign participation. Imports and foreign investments were practically ruled out of a wide range of products in order to develop the domestic production of ""informatics"" goods. Moreover, in contrast to other countries, the Brazilian State had a relative small participation in domestic production, which relied mainly on private firms."
After sixteen years of protection, there is a considerable amount of evidence that the Brazilian policy for microcomputers failed to attain its goals. In short, the technology complexity of certain components allied to an ineffective policy were the major causes of such a failure.
The present study consists of a comprehensive description and analysis of the microcomputer industry and policy along 1976-92. The research material used came from a variety of sources of information, such as government data, newspaper price surveys, and interviews with policymakers, regulators and domestic producers. Our research is organized in four main parts. First, the sixteen years of regulatory legislation and institutions are extensively described and discussed. Second, many aspects of the microcomputer industry structure and firms' conduct are presented and analyzed, specially with respect to their relation with government intervention. Third, a methodology consisting of hedonic price indexes and a consumer surplus measure is developed to estimate the cost of protecting the microcomputer industry. Finally, the conclusion chapter produces an overall view of the Brazilian experience in protecting a high-tech infant industry by discussing five main issues: (a) the rate of price growth, (b) industry performance in general, (c) excessive competition, (d) role of regulation, (e) mistakes and lessons for future policies.
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