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The Effects of Trade Reforms on Scale and Technical Efficiency

In: Developing Countries in the World Economy

Author

Listed:
  • James Tybout
  • Jaime de Melo
  • Vittorio Corbo

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.

Suggested Citation

  • James Tybout & Jaime de Melo & Vittorio Corbo, 2015. "The Effects of Trade Reforms on Scale and Technical Efficiency," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 10, pages 237-256, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814494908_0010
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