This paper contributes to the literature on global production sharing by investigating the experience of Australian automotive industry which has experienced significant structural change following trade liberalisation. Our analysis indicates that globalisation of the world economy, together with developments in transport and communication, has significantly increased the importance of global production network in Australian automotive industry, leading to a substantial rise in value added share of foreign inputs in its exports, which reached about 80% by 2011. While foreign technology embodied in imported inputs may have made the industry more competitive, lacklustre production and exports performance, especially during the decade to 2010, suggests that flow-on effects are weaker. Nonetheless, some welfare gains through improvements in the motor vehicle affordability index was observed. These findings raise important policy questions for the ongoing industry assistance, including research and development support.
|Number of pages||18|
|Journal||World Economics: the journal of current economic analysis and policy|
|Publication status||Published - 2012|