The Effects of Trade Reforms on Scale and Technical Efficiency

James Tybout, Jaime de Melo and Vittorio Corbo

Chapter 10 in Developing Countries in the World Economy, 2015, pp 237-256 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This paper analyzes the changes in industrial sector performance that accompanied Chile's dramatic trade liberalization of the 1970s. Comparisons of pre- and post-liberalization manufacturing census data reveal little productivity improvement overall. However, adverse macro conditions may have masked the positive effects of trade reforms: industries undergoing relatively large reductions in protection experienced relatively large improvements in average efficiency levels, and relatively large reductions in cross-plant efficiency dispersion. These conclusions are based on maximum likelihood technology estimators that deal with measurement error and incomplete observations.

Keywords: Trade Barriers and Market Structure; Quantitative Restrictions; Political Economy and Migration; Trade and the Environment (search for similar items in EconPapers)
Date: 2015
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