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Industrial labor productivities and tariffs in South Africa: identification based on WTO liberalization reform

journal contribution
posted on 2023-06-08, 12:52 authored by Torfinn Harding, Jørn Rattsø
The analysis of the effect of tariffs for labour productivity faces the challenge of tariff policy endogeneity. Tariff policy is designed to promote economic development and the industrial sector tariff structure may reflect characteristics of the industries protected. We seek to identify the effect of tariffs by taking advantage of multilateral tariff liberalization using reductions in industrial sector tariffs in other world regions as instruments for sectoral tariff reductions in South Africa. The data cover 28 manufacturing sectors over the period 1988–2003. We find that tariff reductions have stimulated labour productivity when instrumented by multilateral tariffs. The ordinary least-squares estimates show downward bias and this confirms the endogeneity of tariffs. Investigation of channels of effects shows some support for the importance of competitive pressure and technology spillover from trade liberalization.

History

Publication status

  • Published

Journal

Economics of Transition

ISSN

1468-0351

Publisher

Wiley-Blackwell

Issue

3

Volume

18

Page range

459-485

Department affiliated with

  • Economics Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2012-10-29

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