Policies of Stimulating Private Investment

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Policies of Stimulating Private Investment

Author:: Steindl, Josef

Scope:: Typoskript, 6 Blätter; mit handschriftlichen Anmerkungen und Anstreichungen.

Year of publication:: ohne Datum

Language:: English

Topic:: Firm and market structure

JEL Classification:: D43 [Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection]

Shelfmark:: S/M.45.1

DOI:: https://doi.org/10.48671/nls.js.AC14446075

2 in most cases replacing an old equipment with a technically superior one will incidentally also involve an increase in capacity. ( Or, in the case of a shrinking market - think of the steel industry - the worry about the market will exist even without expansion ). Now in all cases where capacity does matter - and that probably is the majority of all cases - there is a strong presumption that the additional market will be sought abroad. In fact, it may be presumed that the behaviour, price policy of firms is fundamentally different in domestic and foreign markets. Very broadly speaking, the domestic market is dominated by the policy of conventional mark-up a la Kalecki, ( fix price according to Hicks ), whereas the foreign markets are predominantly flex-price, i.e. they are nearer to the pattern of the markets for agricultural products though not quite the same. There is, very briefly, more competition on these markets. Now the essence of my contention is that for an aggressive policy of gaining new sales the choosen terrain is almost always abroad and not at home. This contention would seem more easily evident in a pre-war economy with heavily protected markets, which in practice would be subject to open or tacit cartel^, agreements. \ But the mentality appropriate to these institutions has not disappeared. 5ft b Aggressive policies on the domestic market are restrained by the fact that there is in many cases only a restricted number of competitors and their reacttion must be correspondingly strong.

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