Abstract
We investigate how trade liberalization affects aggregate productivity growth, focusing on market reallocation as well as within-firm productivity improvement. To this end, using Indonesian plant-level data from 1993 to 2005, we estimate the plant-level impact of trade liberalization focusing on productivity, output, and the probability to exit. Then, using the simple dynamic simulation method, we calculate the likely impact if tariff rates remain constant in the initial period. Comparing the actual and counterfactual scenarios, our results show that although within-plant productivity improvement through tariff reduction has a sizable impact on aggregate productivity growth, the contribution of market share reallocation is less significant.
| Original language | English |
|---|---|
| Pages (from-to) | 230-249 |
| Number of pages | 20 |
| Journal | Developing Economies |
| Volume | 55 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 2017 Sep 1 |
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Keywords
- Aggregate productivity growth
- JEL classification: F14, L2
- Reallocation effect
- Within-plant productivity improvement
ASJC Scopus subject areas
- Development
- Economics and Econometrics
Cite this
Trade Liberalization, Market Share Reallocation, and Aggregate Productivity : The Case of the Indonesian Manufacturing Industry. / Hayakawa, Kazunobu; Matsuura, Toshiyuki.
In: Developing Economies, Vol. 55, No. 3, 01.09.2017, p. 230-249.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Trade Liberalization, Market Share Reallocation, and Aggregate Productivity
T2 - The Case of the Indonesian Manufacturing Industry
AU - Hayakawa, Kazunobu
AU - Matsuura, Toshiyuki
PY - 2017/9/1
Y1 - 2017/9/1
N2 - We investigate how trade liberalization affects aggregate productivity growth, focusing on market reallocation as well as within-firm productivity improvement. To this end, using Indonesian plant-level data from 1993 to 2005, we estimate the plant-level impact of trade liberalization focusing on productivity, output, and the probability to exit. Then, using the simple dynamic simulation method, we calculate the likely impact if tariff rates remain constant in the initial period. Comparing the actual and counterfactual scenarios, our results show that although within-plant productivity improvement through tariff reduction has a sizable impact on aggregate productivity growth, the contribution of market share reallocation is less significant.
AB - We investigate how trade liberalization affects aggregate productivity growth, focusing on market reallocation as well as within-firm productivity improvement. To this end, using Indonesian plant-level data from 1993 to 2005, we estimate the plant-level impact of trade liberalization focusing on productivity, output, and the probability to exit. Then, using the simple dynamic simulation method, we calculate the likely impact if tariff rates remain constant in the initial period. Comparing the actual and counterfactual scenarios, our results show that although within-plant productivity improvement through tariff reduction has a sizable impact on aggregate productivity growth, the contribution of market share reallocation is less significant.
KW - Aggregate productivity growth
KW - JEL classification: F14, L2
KW - Reallocation effect
KW - Within-plant productivity improvement
UR - http://www.scopus.com/inward/record.url?scp=85028521945&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85028521945&partnerID=8YFLogxK
U2 - 10.1111/deve.12138
DO - 10.1111/deve.12138
M3 - Article
AN - SCOPUS:85028521945
VL - 55
SP - 230
EP - 249
JO - Developing Economies
JF - Developing Economies
SN - 0012-1533
IS - 3
ER -