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Tariffs and Firm Performance in Ethiopia

Author

Listed:
  • Arne Bigsten
  • Mulu Gebreeyesus
  • MÃ¥ns Söderbom

Abstract

We use data on Ethiopian manufacturing firms and commodity-level data on tariffs to examine the effects of trade liberalisation on firm performance. We distinguish the productivity gains that arise from reducing final goods tariffs from those that arise from reducing tariffs on intermediate inputs. We find no evidence that output tariff reduction improves productivity, but we find large positive effects of input tariff reductions. These are robust to alternative productivity measures, treating tariffs as endogenous, and various generalisations of the model. We conclude that policy measures designed to facilitate access to inputs produced abroad may lead to productivity gains.

Suggested Citation

  • Arne Bigsten & Mulu Gebreeyesus & MÃ¥ns Söderbom, 2016. "Tariffs and Firm Performance in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 52(7), pages 986-1001, July.
  • Handle: RePEc:taf:jdevst:v:52:y:2016:i:7:p:986-1001
    DOI: 10.1080/00220388.2016.1139691
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    Citations

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    Cited by:

    1. Marilyne Huchet†Bourdon & Chantal Le Mouël & Mariana Vijil, 2018. "The relationship between trade openness and economic growth: Some new insights on the openness measurement issue," The World Economy, Wiley Blackwell, vol. 41(1), pages 59-76, January.
    2. Christian K. Darko & Giovanni Occhiali & Enrico Vanino, 2018. "The Chinese are Here: Firm Level Analysis of Import Competition and Performance in Sub-Saharan Africa," Working Papers 2018.14, Fondazione Eni Enrico Mattei.
    3. Adugna Lemi & Ian Wright, 2020. "Exports, foreign ownership, and firm-level efficiency in Ethiopia and Kenya: an application of the stochastic frontier model," Empirical Economics, Springer, vol. 58(2), pages 669-698, February.
    4. Arif, Rabia & Jamil, Nida, 2018. "Proposed Methodology for Strategic Trade Policy to Achieve High Value Added Exports: A Case of Pakistan’s Textile Sector," MPRA Paper 90380, University Library of Munich, Germany.
    5. Nida Jamil & Rabia Arif, 2019. "Increasing Exports through Tariff Reductions on Intermediate Goods," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 24(1), pages 29-53, Jan-June.
    6. Hoedoafia, Mabel Akosua, 2020. "On the Link between Trade Liberalization and Firm Productivity: Panel Data Evidence from Private Firms in Ghana," MPRA Paper 99568, University Library of Munich, Germany.

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