Client: Industry Capability Network

Date: June 2006

Author(s): Dr Ganesh Nana

This report presents the results of simulations using a computable general equilibrium model (CGE) to illustrate the economy-wide impact of greater market share for domestically-made products vis-à-vis their imported equivalents. The simulations find the largest impact occurs when there is an increase in domestic market share for the Machinery and Equipment Manufacturing industry. A 5% gain in market share in this industry results in a gain in the trade balance of payments of the order of $90m for the case where there is fixed amount of labour and physical capital for the total economy. This gain rises to over $230m if additional labour and capital resources are available.

In addition, the report updates a selection of multipliers related to the New Zealand manufacturing sector. The updated multipliers have been obtained from a 49-industry input-output table for the March 2004/05 year. This table has been derived from the latest official 126-industry input-output data for the 1995/96 year, by BERL using latest available 2005 data.

BERL#4486