IDEAS home Printed from https://ideas.repec.org/a/spr/sorede/v33y2022i2d10.1134_s1075700722020095.html
   My bibliography  Save this article

The Import Substitution Trap in the Realities of the Automotive Industry

Author

Listed:
  • V. R. Partsvaniya

    (Institute of Social Sciences at the Russian Presidential Academy of National Economy and Public Administration (RANEPA))

Abstract

— The article examines mechanisms underlying the formation of the “import substitution trap,” which is a stable ineffective institution that serves as a means of protecting national producers from foreign competition. The costs and risks of rooting this institution in the Russian automotive industry are analyzed, the import substitution strategies of the Russian government at the current stage of the industry’s development are investigated, the experience of import substitution in the foreign automotive industry is summarized. The conclusion is substantiated that the import substitution policy brings short-term effects but is disadvantageous in the long term. Domestic substitutes can gain a strong market position but their success is fragile and requires continued government support and protectionist patronage. The author shows that the policy of import substitution becomes successful when it relies on competition, when the domestic import substitute, having entered the market and strengthened its position, is gradually deprived of preferential conditions, and the state support of its manufacturer is gradually cut while the market is transferred to a “freewheeling” mode for all players.

Suggested Citation

  • V. R. Partsvaniya, 2022. "The Import Substitution Trap in the Realities of the Automotive Industry," Studies on Russian Economic Development, Springer, vol. 33(2), pages 203-210, April.
    • Handle: RePEc:spr:sorede:v:33:y:2022:i:2:d:10.1134_s1075700722020095
    DOI: 10.1134/S1075700722020095
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1134/S1075700722020095
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1134/S1075700722020095?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Panle Jia Barwick & Shengmao Cao & Shanjun Li, 2021. "Local Protectionism, Market Structure, and Social Welfare: China's Automobile Market," American Economic Journal: Economic Policy, American Economic Association, vol. 13(4), pages 112-151, November.
    2. Waterbury, John, 1999. "The Long Gestation and Brief Triumph of Import-Substituting Industrialization," World Development, Elsevier, vol. 27(2), pages 323-341, February.
    3. Yury Simachev & Mikhail Kuzyk & Nikolay Zudin, 2016. "Import Dependence and Import Substitution in Russian Manufacturing: A Business Viewpoint," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 10(4), pages 25-45.
    4. Anders Skonhoft & Bjart Holtsmark, 2014. "The Norwegian support and subsidy of electric cars. Should it be adopted by other countries?," Working Paper Series 15814, Department of Economics, Norwegian University of Science and Technology.
    5. Volchkova, N. & Turdyeva, N., 2016. "Microeconomics of Russian Import Substitution," Journal of the New Economic Association, New Economic Association, vol. 32(4), pages 140-146.
    6. V. Zagashvili, 2016. "Foreign experience of import substitution and possible conclusions for Russia," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 8.
    7. V. Zagashvili., 2016. "Foreign experience of import substitution and possible conclusions for Russia," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 8.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. B.A. Kheyfets & V.Yu. Chernova2, 2018. "Adaptation of Market Strategies of TNCs in Russia," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 192-205.
    2. Ademuyiwa A. Lawal, 2021. "A Comparative Analysis of Innovative Automobile Policy on Employment in Nigeria and China," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(09), pages 679-686, September.
    3. Fedyunina, A. & Simachev, Yu. & Kuzyk, M. & Averyanova, Yu., 2020. "Structural features of Russian economy integration into global value chains and lessons for structural policy," Journal of the New Economic Association, New Economic Association, vol. 47(3), pages 106-127.
    4. Alexander Kalita & Alexander Chepurenko, 2020. "Competitiveness of Small and Medium Businesses and Competitive Pressure in the Manufacturing Industry," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 14(2), pages 36-50.
    5. Zhao, Da & Yu, Ao & Guo, Jingyuan, 2022. "Judicial institutions, local protection and market segmentation: Evidence from the establishment of interprovincial circuit tribunals in China," China Economic Review, Elsevier, vol. 75(C).
    6. Maximilian Benner, 2019. "Industrial Policy in the EU and Its Neighbourhood: Learning from Policy Experimentation," Economies, MDPI, vol. 7(2), pages 1-22, May.
    7. Saiful Hasan & Terje Andreas Mathisen, 2020. "Policy measures for electric vehicle adoption. A review of evidence from Norway and China," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 0(1), pages 25-46.
    8. Wang, Kunlun & Zheng, Leven J. & Lin, Boqiang, 2024. "Demand-side incentives, competition, and firms’ innovative activities: Evidence from automobile industry in China," Energy Economics, Elsevier, vol. 132(C).
    9. Francisco Candel‐Sánchez & Juan Perote‐Peña, 2020. "Optimal Incentives on Multiple Prosocial Activities when Reputation Matters," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(3), pages 1207-1230, July.
    10. Qiu, Y.Q. & Tsan Sheng Ng, Adam & Zhou, P., 2022. "Optimizing urban electric vehicle incentive policy mixes in China: Perspective of residential preference heterogeneity," Applied Energy, Elsevier, vol. 313(C).
    11. Roberto Amaral-Santos & Ariaster Chimeli & Joao Paulo Pessoa, 2023. "Natural Gas Vehicles: Consequences to Fuel Markets and the Environment," Working Papers, Department of Economics 2023_07, University of São Paulo (FEA-USP).
    12. V.Yu. Chernova & Z.G. Golodova & E.A. Degtereva & A.M. Zobov & V.S. Starostin, 2018. "Russian Industry in Global Value-Added Chains," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 165-178.
    13. Pessoa, Joao Paulo & Santos, Roberto Amaral & Chimeli, Ariaster, 2023. "Natural Gas Vehicles: Consequences to Fuel Markets and the Environment," SocArXiv 7tvgy, Center for Open Science.
    14. Nan Chen & Zemin (Zachary) Zhong, 2024. "History and Country-of-Origin Effects," Marketing Science, INFORMS, vol. 43(1), pages 192-212, January.
    15. Atia Ferdousee, 2022. "Impact of Electric Vehicle Adoption on Electricity Consumption and Generation: Evidence from California," International Journal of Energy Economics and Policy, Econjournals, vol. 12(5), pages 101-110, September.
    16. Purdon, Mark, 2015. "Opening the Black Box of Carbon Finance “Additionality”: The Political Economy of Carbon Finance Effectiveness across Tanzania, Uganda, and Moldova," World Development, Elsevier, vol. 74(C), pages 462-478.
    17. Cooter, Robert D, 2005. "Innovation, Information, and the Poverty of Nations," Berkeley Olin Program in Law & Economics, Working Paper Series qt9sz547bd, Berkeley Olin Program in Law & Economics.
    18. Zheng, Yilin & Lu, Ming & Li, Jiewei, 2022. "Internal circulation in China: Analyzing market segmentation and integration using big data for truck traffic flow," Economic Modelling, Elsevier, vol. 115(C).
    19. A. A. Gnidchenko, 2017. "Import substitution as a complementary strategy," Studies on Russian Economic Development, Springer, vol. 28(6), pages 593-599, November.
    20. Lee Branstetter & Guangwei Li, 2024. "The Challenges of Chinese Industrial Policy," Entrepreneurship and Innovation Policy and the Economy, University of Chicago Press, vol. 3(1), pages 77-113.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sorede:v:33:y:2022:i:2:d:10.1134_s1075700722020095. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.