Infant industries have frequently failed to achieve sustained growth after protection
Empirical analyses of protected sectors like Brazilian ethanol and Argentine biodiesel demonstrate that infant industries frequently fail to achieve viable, sustained growth or cost reductions despite receiving government support.
Both retrieved papers provide empirical evidence indicating that specific protected infant industries failed to successfully mature or justify their protectionist subsidies, thereby supporting the claim.
Kevin Rask. Evidence of the empirical relevance of the infant industry argument for the protection of Brazilian ethanol production. 1994. https://doi.org/10.1111/j.1574-0862.1994.tb00306.x
The study on the Brazilian ethanol industry finds no empirical validity for the infant industry argument, showing a lack of significant cost reductions or economies of scale.
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Julio J. Nogues, Ernesto A. O’ Connor. Rents, “infant industry” and contingent protection policies: gains and losses for Argentina’s biodiesel industry / Rents, “infant industry” and contingent protection policies: gains and losses for Argentina’s biodiesel industry. 2020. https://doi.org/10.34140/bjbv2n3-093
The study on Argentina's biodiesel industry highlights how protectionist policies and subsidies created long-term vulnerabilities, risks, and market distortions rather than sustained independent growth.
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