Does Trade Protection Improve Firm Productivity? Evidence from Philippine Micro Data
The recent trade and productivity literature shows that trade liberalization can lead to productivity gains through increased competition and exit of inefficient firms and reallocation of market shares in favor of more efficient firms. In this paper, an attempt is made to examine the impact of trade liberalization on firm productivity in the Philippines. The country presents an interesting case due to its adoption of selective protection amidst an incomplete trade liberalization process. Based on an unbalanced firm-level panel dataset covering an eight-year period from 1996 to 2006, the results provide some evidence in support of the hypothesis that trade liberalization leads to productivity gains and conversely, protection leads to productivity losses. This is confirmed by the negative and significant coefficient on EPR for the purely importable sector. The results tend to indicate that the selective protection policy undermined the process of output restructuring and reshuffling of resources from less productive to more productive firms as protection of selected industries allowed the survival of inefficient firms.
|Date of creation:||2010|
|Contact details of provider:|| Postal: NEDA sa Makati Building, 106 Amorsolo St., Legaspi Village, Makati City,|
Web page: http://www.pids.gov.ph/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Epifani Paolo, 2003.
"Trade liberalization, Firm Performances and Labor Market Outcomes in the Developing World, what Can We Learn From Micro-Level Data?,"
Rivista italiana degli economisti,
Società editrice il Mulino, issue 3, pages 455-486.
- Paolo Epifani, 2002. "Trade Liberalization, Firm Performance and Labour Market Outcomes in the Developing World: What Can We Learn from Micro-LevelData?," Development Working Papers 172, Centro Studi Luca d'Agliano, University of Milano.
- Paolo Epifani, 2002. "Trade Liberalization, Firm Performance and Labor Market Outcomes in the Developing World What Can We Learn From Micro-Level Data?," KITeS Working Papers 138, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Feb 2003.
- Epifani, Paolo, 2003. "Trade liberalization, firm performance, and labor market outcomes in the developing world : what can we learn from micro-level data?," Policy Research Working Paper Series 3063, The World Bank.
- Mary Hallward-Driemeier & Giuseppe Iarossi & Kenneth L. Sokoloff, 2002. "Exports and Manufacturing Productivity in East Asia: A Comparative Analysis with Firm-Level Data," NBER Working Papers 8894, National Bureau of Economic Research, Inc.
- Chand, Satish & Sne, Kunal, 2002. "Trade Liberalization and Productivity Growth: Evidence from Indian Manufacturing," Review of Development Economics, Wiley Blackwell, vol. 6(1), pages 120-132, February.
- Satish Chand & Kunal Sen, 1996. "Trade Liberalization and Productivity Growth: Evidence from Indian Manufacturing," Trade and Development 96/11, Australian National University, Department of Economics.
- Satish Chand & Kunal Sen, 1996. "Trade Liberalization and Productivity Growth: Evidence from Indian Manufacturing," Departmental Working Papers 1996-11, The Australian National University, Arndt-Corden Department of Economics.
- Harrison, Ann E., 1994. "Productivity, imperfect competition and trade reform : Theory and evidence," Journal of International Economics, Elsevier, vol. 36(1-2), pages 53-73, February.
- Marc-Andreas Muendler, 2004. "Trade, Technology, and Productivity: A Study of Brazilian Manufacturers, 1986-1998," CESifo Working Paper Series 1148, CESifo Group Munich.
- Muendler, Marc-Andreas, 2004. "Trade, Technology, and Productivity: A Study of Brazilian Manufacturers, 1986-1998," University of California at San Diego, Economics Working Paper Series qt6m96c2r7, Department of Economics, UC San Diego.
- Krishna, Pravin & Mitra, Devashish, 1998. "Trade liberalization, market discipline and productivity growth: new evidence from India," Journal of Development Economics, Elsevier, vol. 56(2), pages 447-462, August.
- Pravin Krishna & Devashish Mitra, 1996. "Trade Liberalization, Market Discipline and Productivity Growth: New Evidence From India," Working Papers 96-8, Brown University, Department of Economics.