A company that is founded in isolation might not be able to benefit from "technology spillovers" that its nearby competitors might.
<h3>What are
infant industries?</h3>
An infant industry is a nascent industry that, in its early stages, has relative difficulty competing with established competitors abroad or is completely unable to do so.
Governments are occasionally asked to promote the growth of young sectors by safeguarding domestic industries in their infancy, typically through subsidies or tariffs. Indirect subsidies can occur when import duties are levied or when a restriction is placed on the importation of a raw material or a finished product. According to economists, governmental assistance for developing sectors is only appropriate if there are external advantages.
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