Trade Liberalization and Import Intensity in the Mongolian Manufacturing

Author:

Davaakhuu Oyunbadam1,Sharma Kishor2,Bandara Yapa M. W. Y.3

Affiliation:

1. Open Society Forum of Mongolia, Ulaanbaatar, Mongolia.

2. CDU College of Business and Law, Charles Darwin University, Darwin, NT, Australia.

3. School of Accounting and Finance, Charles Sturt University, Wagga Wagga, NSW, Australia.

Abstract

This article presents an empirical analysis of the consequences of trade liberalization on import intensity in Mongolia, a ‘least-developed landlocked country’ with weak institutions and severe infrastructure bottlenecks. The theoretical framework employed in modelling is based on industrial organization and international trade literature. Our results suggest that foreign investment stimulates import intensity possibly due to the prevalence of intra-firm trade between subsidies, while the protection of domestic market and state ownership reduces import intensity. There is no statistically significant evidence to suggest that import intensity is lower in unskilled labour-intensive industries. These findings have significant policy implications for further liberalization in order to improve Mongolia’s trade competitiveness.

Publisher

SAGE Publications

Subject

Business and International Management

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1. Import Intensity of the Russian Economy;Economy of Regions;2024

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