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Trade Liberalisation, Exit, and Output and Employment Adjustments of Australian Manufacturing Establishments

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  • Alfons Palangkaraya
  • Jongsay Yong

Abstract

Using Australian manufacturing establishment data from 1993-94 and 1996-97, we study three possible sources of productivity gains from trade liberalisation: the exit of inefficient establishments, economies of scale from output expansion, and reduction in employment. We find weak evidence that establishments in industries with greater reductions in effective rate of assistance are more likely to exit, strong evidence that they reduce employment, and no evidence for economies of scale through output expansion. Thus the productivity gains appear to come more from the pro-competitive effects which forces establishments to reduce their slackness rather than from the exit of less efficient establishments.

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Bibliographic Info

Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c012_026.

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Length: 28 pages
Date of creation: Jun 2007
Date of revision:
Handle: RePEc:deg:conpap:c012_026

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Keywords: Productivity; Trade Liberalisation; Australia; Manufacturing; Establishment; Exit; Employment;

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Cited by:
  1. Afsin Sahin & Aysit Tansel & M. Hakan Berument, 2013. "Output-Employment Relationship across Sectors: A Long- versus Short-Run Perspective," Koç University-TUSIAD Economic Research Forum Working Papers, Koc University-TUSIAD Economic Research Forum 1311, Koc University-TUSIAD Economic Research Forum.
  2. Alfons PALANGKARAYA, 2012. "The Link between Innovation and Export: Evidence from Australiafs Small and Medium Enterprises," Working Papers, Economic Research Institute for ASEAN and East Asia (ERIA) DP-2012-08, Economic Research Institute for ASEAN and East Asia (ERIA).
  3. Alfons Palangkaraya, 2013. "On the Relationship between Innovation and Export: The Case of Australian SMEs," Melbourne Institute Working Paper Series, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne wp2013n04, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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