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Trade liberalisation, inward FDI and productivity within Australia’s manufacturing sector

Christopher Turnbull, Sizhong Sun and Sajid Anwar

Economic Analysis and Policy, 2016, vol. 50, issue C, 41-51

Abstract: Using a simultaneous equations model, this paper aims to analyse the endogenous relationship among trade liberalisation, inward foreign direct investment and productivity within Australia’s manufacturing sector. Using two-digit quarterly time-series data, from 1988 to 2012, we find empirical support for trade liberalisation as a mechanism for improving productivity within the domestic manufacturing sector. However, we find that inward foreign direct investment has not had a statistically significant impact on productivity within the sector. By drawing on these findings, among others, we make some recommendations for Australia’s international trade, foreign investment and manufacturing industry policies.

Keywords: Trade liberalisation; FDI; Productivity; Manufacturing sector; Australia (search for similar items in EconPapers)
JEL-codes: F14 F21 O11 (search for similar items in EconPapers)
Date: 2016
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