IDEAS home Printed from https://ideas.repec.org/p/saw/wpaper/wp-20-01.html
   My bibliography  Save this paper

Industrialization, input duties and revenue concerns in Nepal

Author

Listed:
  • Paras Kharel

    (South Asia Watch on Trade, Economics and Environment)

Abstract

This paper seeks to contribute to the discourse on industrialization in Nepal. It shows that it would be premature to write off manufacturing-powered industrialization. It emphasizes that the debate over whether protecting domestic industry from import competition as part of an industrialization strategy works or not is far from settled. It discusses Nepal's muddled input-tariff policy for exports, and examines whether there are valid revenue loss concerns behind the anti-export bias of the tariff policy. While existing research on Nepal suggests revenue loss is not significant if tariff elimination is targeted at inputs used by a few key export products, the paper suggests further extensions and lines of inquiry, taking into account alternative scenarios. Finally, it highlights some questions, trade-offs and issues in tariff setting for the Government of Nepal to ponder.

Suggested Citation

  • Paras Kharel, 2020. "Industrialization, input duties and revenue concerns in Nepal," Working Papers wp/20/01, South Asia Watch on Trade, Economics and Environment.
    • Handle: RePEc:saw:wpaper:wp/20/01
    as

    Download full text from publisher

    File URL: https://sawtee.org/publications/WP20_kharel_industrialization-input-duties-and-revenue-concerns-in-Nepal.pdf
    File Function: First version, 2020
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    2. Amsden, Alice H., 1994. "Why isn't the whole world experimenting with the East Asian model to develop?: Review of the East Asian miracle," World Development, Elsevier, vol. 22(4), pages 627-633, April.
    3. Bas, Maria, 2012. "Input-trade liberalization and firm export decisions: Evidence from Argentina," Journal of Development Economics, Elsevier, vol. 97(2), pages 481-493.
    4. Dani Rodrik, 2016. "Premature deindustrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 1-33, March.
    5. Mary Amiti & Jozef Konings, 2007. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 97(5), pages 1611-1638, December.
    6. Maria Bas, 2012. "Input-trade liberalization and firm export decisions: Evidence from Argentina," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01297739, HAL.
    7. Antonio Andreoni & Mike Gregory, 2013. "Why and How Does Manufacturing Still Matter: Old Rationales, New Realities," Revue d'économie industrielle, De Boeck Université, vol. 0(4), pages 21-57.
    8. Petia Topalova & Amit Khandelwal, 2011. "Trade Liberalization and Firm Productivity: The Case of India," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 995-1009, August.
    9. Helble, Matthias & Shepherd, Ben (ed.), 2019. "Leveraging Services for Development: Prospects and Policies," ADBI Books, Asian Development Bank Institute, number 7, Décembre.
    10. Chevassus-Lozza, Emmanuelle & Gaigné, Carl & Le Mener, Léo, 2013. "Does input trade liberalization boost downstream firms' exports? Theory and firm-level evidence," Journal of International Economics, Elsevier, vol. 90(2), pages 391-402.
    11. Dani Rodrik, 2013. "Unconditional Convergence in Manufacturing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(1), pages 165-204.
    12. Ghosh, Jayati., 2016. "The role of labour market and sectoral policies in promoting more and better jobs in low and middle income countries : issues, evidence and policy options: the case of India," ILO Working Papers 994944592302676, International Labour Organization.
    13. Alberto Portugal & Emir Zildzovic, 2016. "From Evidence to Policy Supporting Nepal’s Trade Integration Strategy," World Bank Publications - Reports 24923, The World Bank Group.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paras Kharel, 2021. "Nepal's elusive quest for export success meets LDC graduation," Working Papers wp/21/01, South Asia Watch on Trade, Economics and Environment.
    2. Paras Kharel & Kshitiz Dahal, 2021. "Trade Policy Coherence and Coordination in Nepal : An Explanatory Assessment," Research Papers rp/21/01, South Asia Watch on Trade, Economics and Environment.
    3. repec:saw:journl:v:1:y:2021:i:1 is not listed on IDEAS
    4. repec:saw:wpaper:wp/22/01 is not listed on IDEAS
    5. repec:saw:wpaper:rp/22/01 is not listed on IDEAS
    6. Posh Raj Pandey & Paras Kharel & Kshitiz Dahal & Dikshya Singh & Swastik Aryal, 2022. "Nepal's graduation from the LDC category : Implications for international trade and development cooperation," Research Papers rp/22/01, South Asia Watch on Trade, Economics and Environment.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maria Bas & Åsa Johansson & Fabrice Murtin & Giuseppe Nicoletti, 2016. "The effects of input tariffs on productivity: panel data evidence for OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 401-424, May.
    2. Zhengwen Liu & Hong Ma, 2021. "Input Trade Liberalization And Markup Distribution: Evidence From China," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 344-360, January.
    3. Liu, Qing & Qiu, Larry D., 2016. "Intermediate input imports and innovations: Evidence from Chinese firms' patent filings," Journal of International Economics, Elsevier, vol. 103(C), pages 166-183.
    4. Maria Bas & Vanessa Strauss-Kahn, 2013. "Input-Trade Liberalization, Export Prices and Quality Upgrading," Working Papers hal-03460775, HAL.
    5. Maria Bas & Vanessa Strauss-Kahn, 2014. "Does importing more inputs raise exports? Firm-level evidence from France," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(2), pages 241-275, May.
    6. C Sharma, 2016. "Does importing more inputs raise productivity and exports? Some evidence from Indian manufacturing," Economic Issues Journal Articles, Economic Issues, vol. 21(1), pages 1-23, March.
    7. Torres Mazzi, Caio & Foster-McGregor, Neil, 2021. "Imported intermediates, technological capabilities and exports: Evidence from Brazilian firm-level data," Research Policy, Elsevier, vol. 50(1).
    8. Fiorini, Matteo & Sanfilippo, Marco & Sundaram, Asha, 2021. "Trade liberalization, roads and firm productivity," Journal of Development Economics, Elsevier, vol. 153(C).
    9. Francisco Requena & Guadalupe Serrano & Raúl Mínguez, 2022. "The role of imports in the intensive margin of exports," Working Papers 2206, Department of Applied Economics II, Universidad de Valencia.
    10. Bacchetta, Marc & Helble, Matthias (ed.), 2020. "Trade Adjustment in Asia: Past Experiences and Lessons Learned," ADBI Books, Asian Development Bank Institute, number 12, Décembre.
    11. Lawrence Edwards & Marco Sanfilippo & Asha Sundaram, 2016. "Importing and firm performance: New evidence from South Africa," WIDER Working Paper Series 039, World Institute for Development Economic Research (UNU-WIDER).
    12. Marco Grazzi & Nanditha Mathew & Daniele Moschella, 2021. "Making one’s own way: jumping ahead in the capability space and exporting among Indian firms," Journal of Evolutionary Economics, Springer, vol. 31(3), pages 931-957, July.
    13. Maria Bas & Ivan Ledezma, 2020. "Trade liberalization and heterogeneous firms’ adjustments: evidence from India," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(2), pages 407-441, May.
    14. John Baldwin & Beiling Yan, 2021. "Globalization, Productivity Performance, and the Transformation of the Production Process," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(4), pages 1088-1115, October.
    15. Maria Bas & Antoine Berthou, 2017. "Does Input-Trade Liberalization Affect Firms’ Foreign Technology Choice?," The World Bank Economic Review, World Bank, vol. 31(2), pages 351-384.
    16. R. Rijesh, 2021. "Liberalization, Import of Capital Goods, and Industrial Exports: Evidence from Indian Manufacturing Sectors," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 13(1), pages 81-103, January.
    17. Görg, Holger & Fritsch, Ursula, 2013. "Outsourcing, Offshoring and Innovation: Evidence from Firm-level Data for Emerging Economies," CEPR Discussion Papers 9603, C.E.P.R. Discussion Papers.
    18. Amiti, Mary & Dai, Mi & Feenstra, Robert C. & Romalis, John, 2020. "How did China's WTO entry affect U.S. prices?," Journal of International Economics, Elsevier, vol. 126(C).
    19. Lawrence Edwards & Marco Sanfilippo & Asha Sundaram, 2020. "Importing and Productivity: An Analysis of South African Manufacturing Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(2), pages 411-432, September.
    20. Matteo Fiorini & Bernard Hoekman & Clément Malgouyres, 2018. "Services policy reform and manufacturing employment: Evidence from transition economies," The World Economy, Wiley Blackwell, vol. 41(9), pages 2320-2348, September.

    More about this item

    Keywords

    Manufacturing; structural transformation; infant industry; liberalization; deindustrialization; industrial policy; trade policy; tariff; revenue loss;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:saw:wpaper:wp/20/01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ankur Singh (email available below). General contact details of provider: https://edirc.repec.org/data/sawtenp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.