The intra-industry trade performance of the Australian manufacturing sector : a dissaggregated study

The intra-industry trade response to trade liberalization of the Australian manufacturing sector at the two digit level has important implications for adjustment costs in terms of output and employment losses. This paper reveals that the intra industry trade response of the miscellaneous manufacturing, textile, clothing and footwear, metal product manufacturing and chemical, petroleum and related products industries has been the strongest as reflected in relatively higher multi-factor productivity and hence export growth thereby minimising output and employment losses. The food, beverages and tobacco and machinery and equipment manufacturing industries have exhibited a weaker intra industry trade performance as mirrored in slower multi-factor productivity and hence export growth thereby incurring higher output and employment losses.