Trade reforms and manufacturing performance: Australia 1989-97

Advocates of the competitive market paradigm strongly believe that “getting the price right” would improve manufacturing performance. Australia experienced extensive trade reforms in the late 1980s and 1990s which were expected to promote a competitive manufacturing sector. This paper examines whether these trade reforms have had a positive impact on the growth performance of the manufacturing sector. Selected growth performance variableslabour productivity, price-cost margins and exports - were regressed on change in protection variables. The results of the study are consistent with the hypothesis that trade reforms have increased the growth performance of the manufacturing sector. Key Words: Trade Reform, Performance, Industry, Australia