The Impact of trade liberalization on productivity of manufacturing industry in Indonesia

MUNIR, Misbakhul, Prof. Yoshi TAKAHASHI

2010 | Tesis | S2 Magister Ekonomika Pembangunan

Industrial development needs a proper trade policy to support industries to be successful. Indonesia has liberalized the trade policy gradually since 1980s. This research investigates the impact of trade liberalization from 1996 to 2005. In term of the manufacturing sector, the impact of trade liberalization can be seen from input side and output side. To capture liberalization in both input and output sides separately, this research use tariff of input and tariff of output variables. Another thing to be considered in this research is manufacturing sector characteristics based on observed characteristics. Empirical study in this research is to investigate the impact of trade liberalization in general and to investigate whether there is different impact or not between sectors based on sector characteristics. The result shows that trade liberalization in the period investigated has a positive impact on manufacturing productivity in overall sector and in most of disaggregated sector. However, the impact is varying between sectors. In line with previous studies, this research also found that input tariff is very important in the discussion of the impact of trade liberalization.

Kata Kunci : Trade liberalization,Productivity,Manufacturing industries