An analysis of supportive policies: The case of Iran automotive industry

Document Type : Research Article

Authors

1 faculity member at univercity of tehran

2 faculty member of College of Farabi

3 PhD candidate at College of Farabi

Abstract

Despite benefiting from a variety of government support over the years, Iran's automotive industry has not yet been able to compete with world-class automakers. Analyzing the government's challenges for effective supportive policies in the automotive industry, or what we call it here developmental rent management, is the main focus of this study. According to the literature review, the framework of developmental rent management was chosen to address the research problem at three levels: political context, organizational and institutional structures, and market and industry structure. Interviewing and documents were used. According to interviews and document reviews, the challenges of rent management are categorized into three levels: Politics, policy and industry. At politics level, political change has caused managerial instability in the industry, and difficult international conditions have made cooperation with international automakers difficult. Macroeconomic instability has added to the industry's problems. At the policy level, current support policies are not effective in encouraging learning for reasons such as unconditionally, lack of specific timeframe, lack of support for new activities, and so on. Lack of focus on the automotive industry in the choice between a domestic brand development strategy and the production of global brands strategy has led to waste on investments. At the industry level, low technology and organizational capability hinder the absorbing different technologies. Ownership structure on the one hand has ease the way for government intervention in the industry and, on the other hand, has blocked much of the automakers' capital in a phenomenon called cyclic shareholding. In the analysis of automobile industry rent management, it can be said that the early stages of development of the automobile industry took place with the help and guidance of the government, but for moving to more sophisticated activities, rent management mechanisms at three levels of politics, policy and industry needs serious reforms.
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Keywords

References

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Iranian Journal of Public Policy
Volume 5, Issue 4
March 2020
Pages 211-240

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