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Economic liberalization's effect on sources of competitive advantage of different groups of companies: the case of India

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  • Vachani, Sushil

Abstract

Rigidly-controlled economies, maligned by proponents of free markets for their inefficiency, were safe havens for companies that operated in them. Government-approved controls created barriers that allowed them to enjoy relative freedom from direct competition. These controls, together with subsidies and other government assistance, created sources of competitive advantage for different groups of companies. With liberalization many of these sources of advantage are quickly vanishing, creating opportunities and threats. This paper analyzes the pre-liberalization sources of advantage for the four major types of companies in India: multinationals, large private local companies, state-owned enterprises and cottage firms. It analyzes how liberalization has an uneven effect on the sources of advantage of those groups and presents recommendations for each.

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  • Vachani, Sushil, 1997. "Economic liberalization's effect on sources of competitive advantage of different groups of companies: the case of India," International Business Review, Elsevier, vol. 6(2), pages 165-184, April.
    • Handle: RePEc:eee:iburev:v:6:y:1997:i:2:p:165-184
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