{
  "title": "Reassessing the Productivity Gains from Trade Liberalization",
  "publication": "IMF Working Papers, March 23, 2016",
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  "summary": "This paper reassesses the impact of trade liberalization on productivity. We build a new, unique database of effective tariff rates at the country-industry level for a broad range of countries over the past two decades.",
  "sections": [
    {
      "heading": "Research scope and data",
      "content": "- Builds a new, unique database of effective tariff rates at the country-industry level for a broad range of countries over the past two decades.\n- Explores both:\n  - the direct effect of liberalization in the sector considered, and\n  - the indirect impact in downstream industries via input linkages."
    },
    {
      "heading": "Main empirical findings",
      "content": "- The indirect input market channel plays a dominant role in fostering productivity gains.\n- A 1 percentage point decline in input tariffs is estimated to increase total factor productivity by about 2 percent in the sector considered.\n- For advanced economies, the implied potential productivity gains from fully eliminating remaining tariffs are estimated at around 1 percent, on average.\n  - These estimates do not factor in the presumably larger gains from removing existing non-tariff barriers.\n- Strong evidence of complementarities between trade and FDI liberalization in boosting productivity."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- A broad liberalization agenda that cuts across different areas is warranted, given complementarities between trade and FDI liberalization.\n- Addressing input tariffs can yield sizable productivity improvements through downstream linkages.\n- Further gains could be realized by tackling non-tariff barriers alongside tariff liberalization."
    },
    {
      "heading": "Keywords and thematic coverage",
      "content": "- Balance of payments, Foreign direct investment, International trade, Production, Productivity, Tariffs, Taxes, Total factor productivity, Trade liberalization\n- Additional keywords: complementarity regression, FDI, fiscal affair, Global, Growth, input tariff, Inputs, Liberalization, output tariff, Productivity, Reforms, tariff data, tariff liberalization, tariff rate, WP\n\nReassessing the Productivity Gains from Trade Liberalization — By JaeBin Ahn, Era Dabla-Norris, Romain A Duval, Bingjie Hu, Lamin Njie (March 23, 2016), IMF Working Papers 2016, 077.\n\n---\n\n Content in this bundle\n\n- wp1677\n  - wp1677 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp1677 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/reassessing-the-productivity-gains-from-trade-liberalization-43828"
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    "Authors: JaeBin Ahn, Era Dabla-Norris, Romain A Duval, Bingjie Hu, Lamin Njie",
    "Published: March 23, 2016",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475546774.001",
    "Builds a new, unique database of effective tariff rates at the country-industry level for a broad range of countries over the past two decades.",
    "Explores both:",
    "The indirect input market channel plays a dominant role in fostering productivity gains.",
    "A 1 percentage point decline in input tariffs is estimated to increase total factor productivity by about 2 percent in the sector considered.",
    "For advanced economies, the implied potential productivity gains from fully eliminating remaining tariffs are estimated at around 1 percent, on average.",
    "Strong evidence of complementarities between trade and FDI liberalization in boosting productivity.",
    "A broad liberalization agenda that cuts across different areas is warranted, given complementarities between trade and FDI liberalization.",
    "Addressing input tariffs can yield sizable productivity improvements through downstream linkages.",
    "Further gains could be realized by tackling non-tariff barriers alongside tariff liberalization.",
    "Balance of payments, Foreign direct investment, International trade, Production, Productivity, Tariffs, Taxes, Total factor productivity, Trade liberalization",
    "Additional keywords: complementarity regression, FDI, fiscal affair, Global, Growth, input tariff, Inputs, Liberalization, output tariff, Productivity, Reforms, tariff data, tariff liberalization, tariff rate, WP",
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