Liberalization and Structural Change in Australian Automotive Industry: An Analysis of Trade and Productivity Performance: 1962–2008

Abstract

This article investigates the effects of policy liberalization on structural change in the Australian automotive industry, with a focus on trade and productivity performance. While there has been a rise in exports and imports, productivity fell significantly following policy liberalization. The absolute fall in productivity appears to have been linked with the excess production capacity and higher production costs. The post-liberalization fall in productivity may signal the beginning of a turnaround, but only if the cost of production is significantly reduced through further reforms.