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This paper provides a new argument for \"shock\" versus \"gradualism\" in the implementation of trade policies. In the simple context of a small open economy with rational expectations, we consider the comparative welfare effects of eliminating an import tariff either immediately as an unanticipated shock, or gradually over a preannounced length of time. The gradualist policy introduces a distortion in consumption-accumulation decisions and generates welfare costs. And if the gradual change is extended over \"too long\" a period, these costs may exceed the long-run benefits of liberalization.

This paper investigates the effects of service trade liberalization on service productivity. Based on a city-level database from 2006 to 2019, we estimate the labor productivity of the service industry and show the varying trends of productivity growth. Additionally, by exploiting the cross-city, cross-time variation at the time of China’s innovation pilot city policy of service trade liberalization, we employ a difference-in-difference strategy to estimate the effects. The empirical evidence suggests that liberalizing the service trade has a positive effect on service productivity. In addition, the evidence indicates that service trade liberalization could increase the productivity of the service industry in cities located in the eastern and central parts of China, as well as in those cities with a higher degree of marketization. The main influencing channels of service trade liberalization on productivity predominantly occur through the increase in technology spillover, market competition, and human capital. China’s evidence highlights the positive relationship between trade liberalization and productivity in the service industry and provides implications for realizing the sustainable development of services in developing countries; therefore, China and other developing countries are suggested to continuously formulate and deepen their service trade liberalization strategy.

Plant-level panel data from Mexico's Annual Industrial Survey is employed to evaluate the impact of reductions in tariffs and import license coverage on final goods, as well as intermediates, on firms'investment decisions. Using data from 1984 to 1990, a period during which a large scale trade liberalization occurred, a dynamic investment equation is estimated using the system-GMM estimator developed by Arellano and Bover (1995) and Blundell and Bond (1998). Consistent with theory, the empirical analyses show that a reduction in import protection on final goods leads to lower plant-level investment, whereas reductions in tariffs and import license coverage on intermediate inputs result in higher investment. Also, firms with larger import costs experience a larger increase in investment following a reduction in import protection. On the other hand, higher markup firms lower investment more aggressively following reductions in tariffs and import license coverage on final goods.

Purpose: The main purpose of this study is to examine the impact of fiscal policy and trade liberalization on Jordan's economic growth. Design/methodology/approach: The study used Augmented Dicky Fuller unit root tests and Kapetanios unit root tests with structural breaks for the empirical investigation.   Findings: Government spending and taxation have a favourable influence on economic growth, according to the simulation results. Public debt has a negative but negligible effect on economic growth. Economic growth is significantly influenced by trade liberalisation.   Research implications: The consequence is the proportion of spending on infrastructure and human resources should be increased by taxes financing rather than foreign loans. Improving the competitiveness of domestic industries is necessary for free trade to have a positive effect.   Originality/value: This study is innovative due to the absence of research that addresses Fiscal Policy, Trade Openness and economic growth with the structural break in Jordan.

This paper studies the impact of input-trade liberalization on firms' decision to upgrade foreign technology embodied in imported capital goods. Our empirical analysis is motivated by a simple theoretical framework of endogenous technology adoption, heterogeneous firms and imported inputs. The model predicts a positive effect of input tariff reductions on firms' technology choice to source capital goods from abroad. This effect is heterogeneous across firms depending on their initial productivity level. Relying on India's trade liberalization episode in the early 1990s, we demonstrate that the probability of importing capital goods is higher for firms producing in industries that have experienced greater cuts on tariffs on intermediate goods. Only those firms in the middle range of the initial productivity distribution have benefited from input-trade liberalization to upgrade their technology.

International commerce is a crucial driver of economic growth in developing nations and is frequently recommended as a means of reducing poverty. This study analyses the complex relationship between trade liberalisation and poverty alleviation, using South Africa as a case study. It critically evaluates trade policies and their consequences, as well as the role of domestic structural issues like inequality, education, and governance in influencing trade’s distributive impact. While South Africa has pushed commercial liberalisation and regional integration, poverty and inequality have persisted. The study finds that without inclusive and supportive domestic policies, trade liberalisation is insufficient for long-term poverty alleviation.

This paper examines how input trade liberalization affects manufacturing employment adjustment using highly disaggregated Chinese firm-level data. Employing a difference-in-differences estimation strategy, we find that input trade liberalization promotes firm net job growth along both the channels of increasing job creation and reducing job destruction. In addition, we explore the employment response to input trade liberalization of firms that are heterogeneous along two dimensions, i.e., initial relative productivity and import status. In particular, input trade liberalization leads to job destruction in the least productive firms, job creation in more productive firms and increases the exiting likelihood of the least productive firms; and the impact of input trade liberalization on job flows is more pronounced for importing firms than that for non-importers. We also find strong evidence that a good institutional environment strengthens the effects of input trade liberalization on both of the intensive and extensive margin of employment adjustment. As an extension, this paper further demonstrates that input trade liberalization promotes industrial productivity growth significantly, and the improvement of the job reallocation efficiency is one of the important channels.

Based on a novel, detailed, time-consistent tariff database taking account of import protection developments in the agricultural sector since 2001, we propose a statistical decomposition of the changes in the various types of tariffs. The results show that the multilateral system has played a limited role in trade liberalisation over the period. Many countries have continued to apply much lower tariffs on agricultural products than their WTO ceilings. Moreover, there has been substantial unilateral dismantling of tariffs over the period, so that much of the liberalisation took place outside WTO and regional agreements. The number of regional trade agreements has surged, but their impact on applied agricultural tariffs has been limited. Finally, we investigate the tariffs, trade and production implications for food and agricultural products of two extreme scenarios in the future development of trade negotiations: an ambitious surge of regional agreements and a trade war within the WTO context.

Considering that upstream monopoly will lead to an exponential increase in the loss of social welfare, this paper investigates the impact of intermediate goods tariff concession on the welfare loss of manufacturing enterprises from the perspective of input trade liberalization and effective market power. It has been discovered that input trade liberalization significantly reduces the welfare loss of manufacturing enterprises. Due to the game condition in which oligopolies check each other and small businesses “gain from fishing”, the inhibitory impact increases as market share decreases. The mechanism test demonstrates that input trade liberalization boosts the effect of technical competition and minimizes welfare loss through promoting market development degree and reducing factor distortion. In addition, this paper also finds that the effect of input trade liberalization on high monopolistic power enterprises is obviously stronger than that of low monopolistic power enterprises. Furthermore, the impact on non-high-tech industries and capital-intensive enterprises is significant, while that on high-tech industries and labor-intensive industries is not. Therefore, the welfare loss should be investigated from the dual perspective of market structure and marker power. Competitiveness has an important effect, while trade liberalization of intermediate inputs has a pivotal effect on promoting market development and improving resource allocation efficiency.