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By Paul Krugman

Nobel-Prize-winning economist Paul Krugman argues that enterprise leaders have to comprehend the diversities among financial coverage at the nationwide and foreign scale and company process at the organizational scale. Economists care for the closed method of a countrywide economic climate, while executives stay within the open-system global of industrial. furthermore, economists comprehend that an economic system has to be run at the foundation of common rules, yet businesspeople are endlessly looking for the actual superb approach. Krugman's article serves to explain the area of economics for businesspeople who're so on the subject of it and but are regularly annoyed by means of what they see. considering 1922, Harvard company Review has been a number one resource of leap forward administration ideas-many of which nonetheless communicate to and impression us this day. The Harvard company evaluate Classics sequence now bargains readers the chance to make those seminal items part of your everlasting administration library. each one hugely readable quantity features a groundbreaking concept that maintains to form top practices and encourage numerous managers round the world-and can have an immediate effect on you this day and for years to come.

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Nor did economies of scale, managerial efficiency, technological dynamism or actual consumer interest figure in the implementation of this set of controls. Furthermore, large private enterprises with foreign equity participation of over 40 per cent were subjected to even tighter controls. The Foreign Exchange Regulation Act (FERA) of 1974 forced foreign investors to dilute their equity share to 40 per cent or less The Policy Setting 31 unless they were deemed to be in 'high technology' or export-oriented activities.

It requires an effort of imagination to disentangle them. 3 29 INDUSTRIAL POLICIES Indian industrial policies evolved over the 1950s and 1960s to a highly complex apparatus of regulation, covering practically every aspect of a manufacturing firm's existence and operations. The trade regime described earlier required the licensing of all imports, capital goods and intermediate inputs alike, severely circumscribing its access to foreign sources. This effectively determined the vintage and quality of the embodied technology it could deploy.

While not exercised very frequently, the option served to deter new investment by several large firms. All these policies affected technological development indirectly. They restrained competition, growth and the efficient allocation of resources, so inhibiting the incentives and resources for improving technology. The government also launched several policies directly related to science and technology. Ostensibly intended to build up indigenous technological capabilities, the results they achieved were mixed.

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A Country Is Not a Company by Paul Krugman


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