This presentation is part of: F14-1 Macroeconomic Problems of the OECD Countries

The Role of Price and Non-price Factors in Predicting Australia's Trade Performance

Kishor Sharma, Professor, Faculty of Commerce, Charles Sturt University, Australia, Charles Sturt University, P.O.Box 588 Wagga Wagga, NSW 2678, Wagga Wagga, Australia

Abstract

 Using quarterly data for March 1988 to June 2005, this paper investigates the role of price and non-price factors in predicting Australia’s trade performance in 34 manufacturing industries at the two-digit level. While our results tend to suggest that Australia’s trade performance is influenced by both price and non-price factors; the non-price factors, particularly R&D and FDI, are crucial in a larger number of industries both in the short-run and long run. The policy implication of this is that there are dividends in terms of improved trade performance by increasing R&D expenditure and FDI in the manufacturing sector as well as reducing effective rates of protection and implementing appropriate policies that would increase price-competitiveness of Australian manufacturing industries.
__________________________________________
Keywords: Trade performance, price and non-price factors, relative price, R&D, FDI, effective rate of protection, Australia. JEL Classification Codes: F1, F11, F14 and F17


See more of F14-1 Macroeconomic Problems of the OECD Countries
See more of Program Committee Organized Sessions

See more of The 65th International Atlantic Economic Conference