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The effects of input tariffs on productivity: panel data evidence for OECD countries

Author

Listed:
  • Maria Bas

    (University of Paris 1 Pantheon Sorbonne)

  • Åsa Johansson

    (OECD Economics Department)

  • Fabrice Murtin

    (OECD Economics Department)

  • Giuseppe Nicoletti

    (OECD Economics Department)

Abstract

Based on a panel of 16 OECD countries and 10 manufacturing industries over 1996–2007, this paper investigates the impact of tariffs on foreign intermediate goods on productivity growth in downstream manufacturing industries. The results show that imposing tariffs on imported intermediate goods is particularly harmful for industries that operate close to the global technological frontier. We also consider the possibility that input-tariff liberalisation may have different effects depending on the technological content of imported intermediate goods. Our findings suggest that protecting imports of high-technological goods is more harmful for productivity improvements in industries that operate close to global best practice.

Suggested Citation

  • Maria Bas & Åsa Johansson & Fabrice Murtin & Giuseppe Nicoletti, 2016. "The effects of input tariffs on productivity: panel data evidence for OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 401-424, May.
    • Handle: RePEc:spr:weltar:v:152:y:2016:i:2:d:10.1007_s10290-016-0247-z
    DOI: 10.1007/s10290-016-0247-z
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    3. Erik Hille & Patrick Möbius, 2019. "Environmental Policy, Innovation, and Productivity Growth: Controlling the Effects of Regulation and Endogeneity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1315-1355, August.
    4. Chakraborty, Pavel & Raveh, Ohad, 2018. "Input-trade liberalization and the demand for managers: Evidence from India," Journal of International Economics, Elsevier, vol. 111(C), pages 159-176.
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    6. Christina Poetzsch, 2017. "Technology transfer on a two-way street: R&D spillovers through intermediate input usage and supply," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(4), pages 735-751, November.
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    8. Zhengwen Liu & Hong Ma, 2021. "Input Trade Liberalization And Markup Distribution: Evidence From China," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 344-360, January.

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    More about this item

    Keywords

    Productivity; Growth; Catching-up; Intermediate input tariff; Trade;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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