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Discussion
An obvious and controversial extension of new trade theory is the implication that governments should consider strategic trade policies. Strategic trade policies would suggest that governments should nurture and protect firms and industries where first mover advantages and economies of scale are likely to be important, as doing so can increase the chance that a firm will build economies of scale and eventually end up a winner in the global competitive race.
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As per the new trade theory, it can be understood that the present conditions of the target markets can only be handled and utilized properly if there is enough government intervention made in order to keep young industries being run and operated continuously and gradually in the long run.
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