Export incentives and labor productivity in the Philippine manufacturing sector, 1956-77
Date
1982-10
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Abstract
This work is a study on the effects of export incentives, granted by the Board of Investments through the Export Incentives Act (RA 6135), on labor productivity of manufacturing in the Philippines. The study covers a period of twenty two years, from 1956 to 1977, and utilizes both multiple regression and production function analyses as the main tools of investigation applied on time-series and cross-section data. The estimation technique used is the ordinary least squares (OLS) regression method.
Estimation and analysis of results show that for the manufacturing sector in general, the implementation of export incentives has no significant effect on labor productivity growth over time. Moreover, it also has no significant influence on labor productivity variations across Philippine manufacturing industries.
For some specific industrial sectors however, the analyses show that export incentives have indeed positively contributed not only to the growth of labor efficiency but also to the generation of additional labor employment. This observation is true for five industries namely: Electrical Machinery, Apparatus, Appliances and Supplies, Chemical Products, Footwear, Machinery except Electrical Machinery and Transport Equipment. For the rest of the sectors on the other hand, the effects of export incentives have been insignificant.