Causes of the pattern of manufacturing industry assistance in New Zealand, 1981/82

Abstract

Public assistance to manufacturing industries, in the form of import licensing, subsidies, tariffs, and tariff and tax concessions have been important features of the New Zealand economy. The purpose of this paper is to quantitatively model the inter‐industry assistance pattern to test hypotheses about the causes of government support for industry. The econometric results tend to suggest that manufacturing assistance in 1981/82 was most concerned with assisting import competing industries with declining workforces and workers with low skill levels. None of the major hypotheses put forward overseas were strongly supported in the New Zealand case.

Notes

The authors wish to acknowledge the assistance of Beit Ward, Tony Rayner, Angus Mclntyre, Szeto Kam Leong, Sarath Delpachitra, Maryanne Aynsley, staff of the Department of Statistics (Christchurch and Auckland) and the Treasury, and seminar participants at Lincoln and Otago Universities. Alfred Wong and two anonymous referees made especially valuable comments. None of these people are implicated with any of our conclusions. Annette Oakes provided invaluable typing and production assistance. We are grateful to the Agribusiness and Economics Research Unit, Lincoln University for providing financial support.