Trade Reforms and the Survival of the Passenger Motor Vehicle Industry in Australia

The Passenger Motor Vehicle (PMV) industry in Australia experienced extensive trade reforms in the late 1980s which were expected to promote a competitive PMV industry. This paper tests the hypotheses that decreasing protection have had a significant effect on production, imports, exports, labour productivity and organizational innovations (A1); and this effect is particularly evident since 1988 (A2). We have used cointegration analysis to test the hypothesis (A1) and the Chow test for (A2). Our study confirms our two hypotheses.