Barriers to exit in the steel sector

Michele Rimini, Anthony de Carvalho, Fabien Mercier, Valentina Burrai, Benjamin Liebman and Timothy de Stefano
Additional contact information
Michele Rimini: OECD
Anthony de Carvalho: OECD
Fabien Mercier: OECD
Valentina Burrai: OECD
Benjamin Liebman: Saint Joseph’s University
Timothy de Stefano: Harvard Business School

No 93, OECD Science, Technology and Industry Policy Papers from OECD Publishing

Abstract: This paper explores the nature of exit barriers in the steel industry, their social and economic implications, and policy approaches to deal with exits and steel industry restructuring. Barriers to exit in the steel industry require attention due to their negative impacts on excess capacity. Such barriers mainly stem from government interventions that hinder the closure of inefficient or unviable steel plants, though cost factors specific to the steel industry are important barriers, as well. Exits may also entail important costs associated with redundancy payments to workers, environmental clean-up and operations to dismantle mills. The paper concludes with specific policy recommendations to promote adjustment, including removing subsidies and other government support measures that maintain unviable plants, assisting displaced steel workers into other activities, and other measures to limit the social costs of steel plant closures.

Keywords: barriers to exit; steel; steel excess capacity; structural adjustment; subsidies and support measures (search for similar items in EconPapers)
Date: 2020-10-13
New Economics Papers: this item is included in nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:oec:stiaac:93-en

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