Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia

Mary Amiti () and Jozef Konings

American Economic Review, 2007, vol. 97, issue 5, pages 1611-1638

Abstract: 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)

View citations in EconPapers

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia (2005)
Working Paper: Trade Liberalization, Intermediate Inputs and Productivity: Evidence from Indonesia (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Ordering information: This journal article can be ordered from
http://www.aeaweb.org/subscribe.html

Access Statistics for this article

American Economic Review is edited by Robert Moffitt

More articles in American Economic Review from American Economic Association
Contact information at EDIRC.
Series data maintained by Christopher F. Baum ().