Solyndra Case Analysis

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Reflection on Case Analysis: Shaping the Future of Solar Power The most useful thing I learned during this session is that the government should have tried to use more instruments of trade in order to strike a deal with China. We clearly did not have the capacity to make our own solar panels and capture a significant portion of the marker share, so we should have allowed China to continue in the specialization of solar energy. For example, the U.S. could have imposed tariffs or provided subsidies on Chinese solar panels in order to promote trade. However, should things have gotten out of hand, they could have used anti-dumping policies and restrictive administrative policies to slow trade. One major point made during the session was that the government should have invested in a larger, more stable company, rather than small startups who lacked the capability to compete with China’s large-scale operations and massive subsidies. However, I think the U.S. government’s decision can be defended using the Infant Industry argument and the Strategic Trade policy. The Infant Industry argument states, “An industry should be protected until it can develop and be viable and competitive internationally”. Clearly, the government was just trying to protect the industry. However, if the U.S. was ever to compete, the companies they selected should have already been capable of raising the funds. The Strategic Sourcing policy states, “In cases where there may be important first mover advantages, governments can help firms from their countries attain these advantages”. I think that the U.S. was trying to utilize this strategy by investing in small companies (they didn’t do their research) and wanted to move quickly in order to gain an advantage. The most unclear part of the session was about how much money was actually lost in the investments that the U.S. government made in the
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