Trade liberalisation and technical efficiency: Evidence from Bangladesh manufacturing industries

Hossain, M. A. and Karunaratne, N. D. (2004) Trade liberalisation and technical efficiency: Evidence from Bangladesh manufacturing industries. The Journal of Development Studies, 40 3: 87-114. doi:10.1080/0022038042000213210

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Author Hossain, M. A.
Karunaratne, N. D.
Title Trade liberalisation and technical efficiency: Evidence from Bangladesh manufacturing industries
Journal name The Journal of Development Studies   Check publisher's open access policy
ISSN 1743-9140
Publication date 2004-02
Sub-type Article (original research)
DOI 10.1080/0022038042000213210
Volume 40
Issue 3
Start page 87
End page 114
Total pages 28
Editor C. Milner
H. White
J. Harriss
Place of publication Oxfordshire, U.K.
Publisher Frank Cass Publishers
Collection year 2004
Language eng
Subject C1
340213 Economic Development and Growth
720404 Productivity
720301 Trade policy
720399 International trade issues not elsewhere classified
Abstract 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.
Keyword Trade liberalisation
Manufacturing industry
Q-Index Code C1

Document type: Journal Article
Sub-type: Article (original research)
Collections: Excellence in Research Australia (ERA) - Collection
2005 Higher Education Research Data Collection
School of Economics Publications
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Citation counts: TR Web of Science Citation Count  Cited 10 times in Thomson Reuters Web of Science Article | Citations
Scopus Citation Count Cited 16 times in Scopus Article | Citations
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Created: Wed, 15 Aug 2007, 03:39:07 EST