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Trade Liberalization, Intermediate Inputs, and Productivity

Evidence from Indonesia

Bibliographic Data

ID23364299
AuthorsMary Amiti (Federal Reserve Bank of New York), Jozef Konings (0000-0003-1280-4674, KU Leuven)
Year2007
Volume97
Issue5
Pages1611-1638
Publication date2007-12-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueAmerican Economic Review (JOURNAL)
Journal identifiersISSN: 0002-8282 • E-ISSN: 1944-7981
PublisherAmerican Economic Association (PUBLISHER • US)
DOI10.1257/aer.97.5.1611
OpenAlexW3121855595
LanguageEN
Citations received235
References cited45

This paper estimates the productivity gains from reducing tariffs on final goods and from reducing tariffs on intermediate inputs. Lower output tariffs can increase productivity by inducing tougher import competition, whereas cheaper imported inputs can raise productivity via learning, variety, and quality effects. We use Indonesian manufacturing census data from 1991 to 2001, which include plant-level information on imported inputs. The results show that a 10 percentage point fall in input tariffs leads to a productivity gain of 12 percent for firms that import their inputs, at least twice as high as any gains from reducing output tariffs. (JEL F12, F13, L16, O14, O19, O24)

Agricultural economics · Competition (biology) · Economics · Free trade · International economics · International trade · Macroeconomics · Point (geometry) · Productivity · Global Trade and Competitiveness · Global trade and economics · International Business and FDI

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Unique citing works235
Citations per year10,68
Citation span2004 - 2026 (23)
Citation velocitycurrent
Highly citedYes
Citation typesNeutral: 221

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