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Local Content Requirements Promises and Pitfalls

Local Content Requirements Promises and Pitfalls
6 November 2023
local content requirements, trade

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The Open Access version of this book, available at


As anti-globalization and geopolitical tensions continue to rise, the use of Local Content Requirements (LCRs) around the world has become more noticeable than ever before.

The reasons for adopting LCRs range from ensuring domestic supply availability, job creation, increasing value added, to safeguarding national security. Ing and Grossman examine country-specific as well as firm-product level exercises to explain how LCRs reduce fair competition, resulting in lower trade and productivity, which ultimately lowers world economic output and overall human welfare. Countries around the world are investigated with specific attention to the US, China, Indonesia, and resource-intensive countries, including mining-intensive ones. The book also presents product and firm level analyses, answering the question of why countries adopted LCRs and how LCRs actually affect the world economy.

A useful resource that will interest policymakers, researchers and advanced undergraduates interested in international trade, industrial policy, political economy, labour economics, and development economics.


About the book

Edited by Lili Yan Ing, Gene M. Grossman

370 Pages 50 B/W Illustrations

Series: Routledge-ERIA Studies in Development Economics

Table of Contents

1.  Introduction  by Gene M. Grossman and Lili Yan Ing

2. Localisation Measures: A Global Perspective by Dorothee Flaig and Susan F. Stone

3. Local Content Policies in the Mining Sector by Jane Korinek and Paulo De Sa

4. The Unintended Consequences of High Regional Content Requirements by Keith Head, Thierry Mayer, and Marc Melitz

5. Local Content Requirement Policies in China and Their Impacts on Domestic Value-added in Exports by Kun Cai and Zhi Wang

6. Indonesia’s Local Content Requirements with its Trade and Investment Commitments by Michelle Limenta, Lili Yan Ing, Junianto James Losari, and Oscar Fernando

7. The Effects of Local Content Requirements on Trade: The Case of Indonesia by Yessi Vadila and David Christian

8. Quantifying the Impacts of LCRs on Firms: Evidence from Indonesia by Lili Yan Ing and Rui Zhang

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