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Trade Liberalization and Productivity Performance: Evidence from the Australian Passenger Motor Vehicle Industry

Author

Listed:
  • Bopage Lionel

    (Department of Industry, 111 Bourke Street, Melbourne, Victoria 3000, Australia)

  • Sharma Kishor

    (School of Accounting and Finance, Charles Sturt University, Wagga Wagga, NSW 2650, Australia)

Abstract

This paper contributes to the ongoing debate about the effects of trade liberalization on productivity performance of the Australian passenger motor vehicle industry, which has experienced significant liberalization over the years. Our analysis indicates that trade liberalization had a negative impact on productivity growth, at least in the immediate post-liberalization period. Empirical results suggest that economies of scale and tariff protection improve productivity, while industry assistance (such as the local content and duty drawback schemes and production subsidies) retards productivity. Policy implications of these findings are that there are dividends in terms of improved productivity by encouraging economies of scale, providing tariff protection and lowering industry assistance.

Suggested Citation

  • Bopage Lionel & Sharma Kishor, 2014. "Trade Liberalization and Productivity Performance: Evidence from the Australian Passenger Motor Vehicle Industry," Global Economy Journal, De Gruyter, vol. 14(3-4), pages 1-19, October.
    • Handle: RePEc:bpj:glecon:v:14:y:2014:i:3-4:p:19:n:2
    DOI: 10.1515/gej-2014-0001
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    References listed on IDEAS

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    1. Edward Oczkowski & Kishor Sharma, 2001. "Imperfect Competition, Returns To Scale and Productivity Growth In Australian Manufacturing: A Smooth Transition Approach To Trade Liberalisation," International Economic Journal, Taylor & Francis Journals, vol. 15(2), pages 99-113, June.
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    6. Renuka Mahadevan, 2002. "Trade liberalization and productivity growth in Australian manufacturing industries," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 30(2), pages 170-185, June.
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    Full references (including those not matched with items on IDEAS)

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