Firm Adjustment to Trade Policy Changes in East Asia

Dionisius Narjoko and Shujiro Urata

No 945, ADBI Working Papers from Asian Development Bank Institute

Abstract: Trade and investment liberalization has been one of the key features of economic policy in many developing countries since the 1990s. Research on this subject has consistently produced more evidence on the benefits of globalization; theoretical studies give more attention to what happens within an industry when trade and liberalization occur, while empirical studies confirm the positive impact of trade liberalization. We review some recent studies on the subject of firms in a globalized economy to enable us to understand more about how firms respond to globalization or changes in trade and investment liberalization. We focus on presenting or explaining the underlying mechanisms through which the effects are realized. The studies we summarized generally confirm the positive impact of trade liberalization on productivity or the spectrum of measures reflecting productivity, such as product quality, firm size, or skill intensity. The positive impact goes through various channels, including competition and industry dynamics, exporting and innovation decisions, and production or investment decisions.

Keywords: trade liberalization; investment liberalization; globalization; productivity (search for similar items in EconPapers)
JEL-codes: F01 F60 O14 O53 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2019-05-06
New Economics Papers: this item is included in nep-int and nep-sea
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbiwp:0945

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