Kozo Kiyota suggested that the authors examine the effects on firm turnover and average firm size. There is a Jie Li paper on the effects of NAFTA on firm size. It is important to check if resource reallocation occurred in Indonesia.

Siow Yue Chia stated that the paper is a useful one given the policy flip-flops in Indonesia and the need to convince policymakers. She pointed out that as far as product quality is concerned, there is a difference between local and imported by unit price but this depends on the level of disaggregation. Alternative measures to differentiate product quality can be used. There is also a difference between becoming a producer of intermediate products versus becoming a final assembler. Indonesia's auto industry is growing rapidly. Can this become a second hub?

Dionisius Narjoko responded first by mentioning an ongoing paper by Amiti using more recent data. On endogeneity, they...

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