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Trade liberalisation, inward FDI and productivity within Australia’s manufacturing sector

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  • Turnbull, Christopher
  • Sun, Sizhong
  • Anwar, Sajid

Abstract

Using a simultaneous equations model, this paper aims to analyse the endogenous relationship among trade liberalisation, inward foreign direct investment and productivity within Australia’s manufacturing sector. Using two-digit quarterly time-series data, from 1988 to 2012, we find empirical support for trade liberalisation as a mechanism for improving productivity within the domestic manufacturing sector. However, we find that inward foreign direct investment has not had a statistically significant impact on productivity within the sector. By drawing on these findings, among others, we make some recommendations for Australia’s international trade, foreign investment and manufacturing industry policies.

Suggested Citation

  • Turnbull, Christopher & Sun, Sizhong & Anwar, Sajid, 2016. "Trade liberalisation, inward FDI and productivity within Australia’s manufacturing sector," Economic Analysis and Policy, Elsevier, vol. 50(C), pages 41-51.
    • Handle: RePEc:eee:ecanpo:v:50:y:2016:i:c:p:41-51
    DOI: 10.1016/j.eap.2016.02.004
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    References listed on IDEAS

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    Cited by:

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    2. Shafiullah, Muhammad & Selvanathan, Saroja & Naranpanawa, Athula, 2017. "The role of export composition in export-led growth in Australia and its regions," Economic Analysis and Policy, Elsevier, vol. 53(C), pages 62-76.
    3. Le, Thai-Ha & Tran-Nam, Binh, 2018. "Relative costs and FDI: Why did Vietnam forge so far ahead?," Economic Analysis and Policy, Elsevier, vol. 59(C), pages 1-13.
    4. Mohamed Abdouli & Sami Hammami, 2020. "Economic Growth, Environment, FDI Inflows, and Financial Development in Middle East Countries: Fresh Evidence from Simultaneous Equation Models," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(2), pages 479-511, June.
    5. O.J. Ojeka & F.C. Odey & D.Y. Adebayo & G. Amodu, 2023. "Finance and economic development in sub-Saharan Africa: Does foreign direct investment matter?," Journal of Economic Policy and Management Issues, JEPMI, vol. 2(1), pages 40-58.
    6. Tran, Nguyen Van & Alauddin, Mohammad & Tran, Quyet Van, 2019. "Labour quality and benefits reaped from global economic integration: An application of dynamic panel SGMM estimators," Economic Analysis and Policy, Elsevier, vol. 63(C), pages 92-106.

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    More about this item

    Keywords

    Trade liberalisation; FDI; Productivity; Manufacturing sector; Australia;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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