Trade liberalization and technical efficiency in the Indonesian chemicals industry
MetadataShow full item record
This article examines the impact of trade reform on technical efficiency on the Indonesian chemicals industry using firm-level panel data. The effects of trade reform on technical efficiency are analysed using a stochastic frontier approach. Two variables represent trade reform in this model: effective rate of protection (ERP) and import ratio (IMP). The findings of the present study suggest that both trade reform variables have significant effects on technical efficiency. The coefficient of ERP has a positive sign and is statistically significant, which means that an increase in ERP increases the inefficiency (or decreases the technical efficiency) of firms in the chemicals industry. The coefficient of IMP is negative and statistically significant, which represents the negative impact of IMP on technical inefficiency (or positive on technical efficiency). Thus, trade reform, a reduction in ERP or an increase in IMP, has an unambiguously positive effect on technical efficiency in the Indonesian chemicals industry.
This is an Author's Original Manuscript of an article published by Taylor & Francis in Applied Economics on 31/01/2017 available online at http://www.tandfonline.com/10.1080/00036846.2017.1282150
Showing items related by title, author, creator and subject.
Le, Hoang Cuong (2012)Vietnam implemented the Doi Moi (or Renovation) policy in 1986. This policy involved the introduction of many structural reforms in an attempt to move Vietnam towards a market economy. As part of Doi Moi, Vietnam’s two ...
Suatmi, Bernadetta Dwi (2016)This thesis examines the effect of trade reform on firm-level efficiency and productivity growth in four selected Indonesian manufacturing industries. The stochastic production frontier (SPF), Färe-Primont productivity ...
Wang, Yi (2012)The pyrolysis of biomass is a very effective means of energy densification. With the bio-char returned to the field as a soil conditioner and for carbon bio-sequestration, bio-oil can be used in many ways, including being ...