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Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia

Amiti, Mary, Konings, Jozef·2007·American Economic Review

Abstract

This paper estimates the productivity gains from reducing tariffs on final goods and from reducing tariffs on intermediate inputs. Lower output tariffs can increase productivity by inducing tougher import competition, whereas cheaper imported inputs can raise productivity via learning, variety, and quality effects. We use Indonesian manufacturing census data from 1991 to 2001, which include plant-level information on imported inputs. The results show that a 10 percentage point fall in input tariffs leads to a productivity gain of 12 percent for firms that import their inputs, at least twice as high as any gains from reducing output tariffs. (JEL F12, F13, L16, O14, O19, O24)

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Metadata

Authors
Amiti, M., & Konings, J.
Venue
American Economic Review
Published
2007-12-01
Volume
97
Issue
5
Pages
1611-1638
ISSN
0002-8282 (ISSN-L)
OpenAlex
W3121855595
Cited by
2,252
References
5
FWCI
96.09
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia. https://app.cochat.ai/papers/10.1257/aer.97.5.1611
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Amiti, M., & Konings, J. (2007). Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia. American Economic Review. https://doi.org/10.1257/aer.97.5.1611

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