EUROPEAN STEEL POLICIES IN THE 1980S - HINDERING TECHNOLOGICAL INNOVATION AND MARKET-STRUCTURE CHANGE

This paper examines the effects of the European Commission's Manifest Crisis Policy of production quotas on the growth of European minimills during the 1980s. In particular, the study seeks to determine whether the Commission-approved secondary market for the quota rights created sufficient flexibility to ensure that low-cost suppliers increased pr oduction during this period of steel industry rationalization. The emp irical results indicate that the policies did significantly hinder min imill growth during the quota period but did not prevent later minimil l expansion.