The choice of industrial policy and proper reverse comparative advantage strategy in late-developing economies: a case study of Taiwan

The proper reverse comparative advantages strategy advocates alternating between the comparative advantage strategy and the reverse comparative advantage strategy. This approach maximises the utilisation of existing comparative advantages, harnessing market mechanisms to achieve industrial structural upgrading. At the same time, it leverages industrial policies to swiftly realise economies of scale when necessary, thereby accelerating the formation of comparative advantages in emerging industries and accomplishing industrial structural upgrading. This strategy represents the optimal economic development strategy for developing countries or regions. Its theoretical foundation lies in the diverse origins of comparative advantages, necessitating a diversified approach to leveraging them for economic development. The economic development of Taiwan is closely intertwined with the application of industrial policies, making it a typical case for implementing the proper reverse comparative advantages strategy.