In a few short years, Embraer, the Brazilian state-owned aerospace company, captured a third of the U.S. market for turboprop aircraft with its Bandeirante plane. The aircraft's physical characteristics and price, as well as market conditions created by deregulation, all contributed to its marketing success. However, subsidized financing was also important in helping the plane gain market share. This article explores the broader implications of competing with subsidized state-owned enterprises and examines Embraer's success in competing in a high-technology industry with companies from more developed countries.
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