Industrialisation: Import Substitution to Export Promotion

Import-substitution policy creates biases in the incentive structure and lowers the growth of potential exports in the long run. Trade reforms in this respect are likely to reduce the gap between domestic and border prices. The expectation is to bring better industrial performance on the lines of comparative advantages. This paper examines the import-substitution policy and the effect and impact of trade liberalisation.import substitution, exports, industrialisation, export promotion

The Impact of Trade Liberalisation on Manufacturing Sector Performance in Developing Countries: A Survey of the Literature

Empirical studies that have examined the relationship between trade reforms and manufacturing performance have tended to use productivity growth, export growth and changes in price-cost margins as yardsticks of performance measures. We have examined the available literature for the purpose of drawing some conclusions and have obtained mixed results.trade reforms, trade liberalisation, manufacturing sector, developing countries, literature survey

An Empirical Assessment of the Impact of Intra-Industry Trade on Employment: Australia 1989/90-2000/01

This paper investigates dynamic aspects of labour market adjustment in Australia during 1989/90 and 2000/01 due to extensive trade reforms and associated developments in intra-industry trade. In view of the foregoing, it was hypothesised that trade reforms have had a positive impact on employment to the extent that trade flows are intra-industry. We do find that declining protection over this period is associated with increased employment to the extent that trade flows are intra-industry.Trade reforms, Australian manufactured exports

Trade Policy Reform and the Textile, Clothing and Footwear Industry, Australia: 1993-97

Textiles, clothing and footwear (TCF) industries in Australia experienced extensive trade reforms in the 1990s, which were expected to promote a competitive TCF activities. This paper examines two hypotheses (1) trade reforms have had a positive impact on TCF industries and (2) trade reforms have had an adverse impact on Small and Medium Enterprises (SMEs). Selected growth performance variables were intensively analysed. The results of the study are consistent with hypothesis (1) but are inconclusive with hypothesis (2). It was found that the positive productivity effect of SMEs does not appear to have been translated into export gain. The needs for further research to identify and focus upon the barriers inhibiting the export performance of SMEs is suggested.trade reforms, manufacturing performance, Australia

Trade Reforms and the Survival of the Passenger Motor Vehicle Industry in Australia

The Passenger Motor Vehicle (PMV) industry in Australia experienced extensive trade reforms in the late 1980s which were expected to promote a competitive PMV industry. This paper tests the hypotheses that decreasing protection have had a significant effect on production, imports, exports, labour productivity and organizational innovations (A1); and this effect is particularly evident since 1988 (A2). We have used cointegration analysis to test the hypothesis (A1) and the Chow test for (A2). Our study confirms our two hypotheses.passenger motor vehicle industry, trade reform, labour productivity, organizational innovations

Australia and New Zealand CER Agreement and Breakpoints in Bilateral Trade: An Application of the Wald-type Test

This paper investigates the impact of the Australia-New Zealand Closer Economic Relations (CER) Trade Agreement on bilateral trade of each member country by using historical time series data before and after the implementation of the CER. We determined the existence of endogenously determined structural breaks over the last 30 years. The Vogelsang (1997) Wald-type testing procedure is then used to test for the existence of a break at an unknown time in the trend function of the dynamic time series. The advantage of this model is that the procedure does not impose any restriction on the nature of the data since it allows for either trending or unit root series, or both, in the model. Using a Wald-type test for detecting breaks in the trend function of a univariate time series, we found that a significant trend break detected in New Zealand in 1988 coincided with the extensive review of the CER in 1988.Trend breaks, Wald-type testing, Australia-New Zealand integration

The Impact of Exchange Rate Volatility on Indonesia’s Exports to the USA: An Application of ARDL Bounds Testing Procedure

This paper investigates the long-run and short-run impacts of exchange rate volatility on Indonesia’s exports of priority commodities to the United States of America over the monthly period 1997-2005. Estimates of cointegration relations are obtained using ARDL bounds testing procedure. Estimates of the short-run dynamics are obtained using an error-correction model. The results show significant positive and negative coefficients among the range of commodities. However, in the long-run, majority of commodities tend to support the traditional view that higher exchange rate of volatility leads to higher cost and to less foreign trade. The net effect of exchange rate uncertainty on production and exports depends on the degree of relative risk aversion of the exporter of various commodities. This ultimately influences the reallocation of resources by participants.Exchange rate volatility, exports, ARDL bounds testing, error-correction model, Indonesia

The Consequences of Trade Liberalisation on the Australian Passenger Motor Vehicle Industry

This paper is an appraisal of the impact of Australian trade liberalization measures on imports, exports, productivity, and internal demand of the passenger motor vehicle industry. There is clear evidence that this liberalization has increased the volume of trade, imports, exports, and productivity, but reduced the locally produced cars for internal consumption. Various models are constructed and applied. Thus, this paper is an application of the bounds testing procedure based on the ARDL approach to cointegration and the comparison of the latter with the OLS and Johansen’s cointegration methods in the contexts of small samples.Trade liberalization, Australian Passenger motor vehicle industry, ARDL approach

An Overview of Export Processing Zones: Selected Asian Countries

This paper surveys the literature on the performance of Export Processing Zones (EPZs) that have used benefit-cost analytical framework. Survey reveals that as industrial development proceeds, the gap between market and opportunity cost of labour narrow and the interest on EPZs tends to disappear. Interest on EPZs may hold only if the zones generate private profit to domestic shareholders. Recent policy measures of the World Trade Organisation may eventually result in lower rates of private returns and may possible threat to the existing and new EPZs.Export Processing Zones

Structural Breaks in Trade and Income Per Capita in ASEAN-5 Countries: An Application of Innovational Outlier Models

The founder members of the Association of Southeast Asian Nations (ASEAN-5) – Malaysia, Indonesia, Thailand, the Philippines and Singapore – increasingly adopted outward-oriented policies in trade and investment by enforcing reforms in the mid-1980s. This paper investigates the existence of endogenously determined structural breaks of the trade and income per capita by using historical time series data during the period from 1970 to 2003 for the ASEAN-5 by applying an Innovational Outliner (IO) model in the presence of a potential structural break. We find that significant structural breaks occurred for trade per capita in the mid-1980s, which coincides with the recession in the region. We also find that significant structural breaks occurred for Gross National Income (GNI) per capita in 1997, which coincides with the Asian crisis. The Philippines experienced structural breaks in 1985, which coincides with a recession.Trade and GDP per capita, IO model, structural break