Trade liberalisation and technical efficiency: Evidence from Bangladesh manufacturing industries

The paper investigates the effects of trade liberalisation on the technical efficiency of the Bangladesh manufacturing sector by estimating a combined stochastic frontier-inefficiency model using panel data for the period 197894 for 25 three-digit level industries. The results show that the overall technical efficiency of the manufacturing sector as well as the technical efficiencies of the majority of the individual industries has increased over time. The findings also clearly suggest that trade liberalisation, proxied by export orientation and capital deepening, has had significant impact on the reduction of the overall technical inefficiency. Similarly, the scale of operation and the proportion of non-production labour in total employment appear as important determinants of technical inefficiency. The evidence also indicates that both export-promoting and import-substituting industries have experienced rises in technical efficiencies over time. Besides, the results are suggestive of neutral technical change, although (at the 5 per cent level of significance) the empirical results indicate that there was no technical change in the manufacturing industries. Finally, the joint test based on the likelihood ratio (LR) test rejects the Cobb-Douglas production technology as description of the database given the specification of the translog production technology.

The influence of regionalization and psychic distance on the direction of Australian exports

International business research has identified separately two distinct influences on the direction of firm internationalisation. One of those influences is psychic distance, the other is regionalisation. This paper sets out to test the influences of regionalisation and psychic distance on the direction of Australian merchandise exports. The paper applies a quantitative methodology using a multiple regression model on a large, purposively compiled data set. Unlike most previous outward internationalisation studies, which use the firm as the unit of analysis, this paper uses aggregated Australian export values by country destination and export category over an extended time period, 1990 to 2004. The findings show that regionalisation is the dominant influence on the direction of Australian merchandise exports. This has important trade policy implications for Australian state and federal governments, related export promotion agencies and for managers of Australian firms, as well as for international business researchers generally.