Can strengthening the local content requirements meet a government’s need to raise industrial productivity and production?

Journal of Applied Economics

Shiue-Hung Lin¹  Yungho Weng² 

[1] NanFang College of Sun Yat-Sen University;National Chengchi University;

关键词: local content requirements;    industrial productivity;    industry production;    firm heterogeneity;   

DOI  :  10.1080/15140326.2020.1753468

来源: DOAJ

【 摘 要 】

By taking firm heterogeneity in productivity into account in a monopolistic competition market in a general-equilibrium model setting, this paper investigates whether a stricter local content requirements (LCRs) can increase both productivity and production in the domestic intermediate-goods industry. The result shows that stricter LCRs policy cannot simultaneously increase both. The initial level of LCRs plays an important role in policy effectiveness. If it is below a critical level, a stricter LCRs can increase production but decrease productivity; however, production decreases but productivity increases if the initial LCRs are higher than the critical level.

【 授权许可】

Unknown