Trade Liberalisation and Productivity Growth: Time-Series Evidence From Australian Manufacturing

This paper uses historical annual data for 27 years from 1968-9 on eight two-digit ANZSIC industries to assess the impact of the changes in industry assistance on economic efficiency. The empirical analysis shows that a one percent decline in the nominal rate of assistance leads to between 0.18 and 0.56 percent gain in multi-factor productivity, the latter our measure of economic efficiency. This finding has strong policy ramifications for the future of tariff reform in the manufacturing sector.