Trade Liberalization and Investment : Firm-level Evidence from Mexico
Plant-level panel data from Mexico's Annual Industrial Survey is employed to evaluate the impact of reductions in tariffs and import license coverage on final goods, as well as intermediates, on firms'investment decisions. Using data from 1984 to 1990, a period during which a large scale trade liberalization occurred, a dynamic investment equation is estimated using the system-GMM estimator developed by Arellano and Bover (1995) and Blundell and Bond (1998). Consistent with theory, the empirical analyses show that a reduction in import protection on final goods leads to lower plant-level investment, whereas reductions in tariffs and import license coverage on intermediate inputs result in higher investment. Also, firms with larger import costs experience a larger increase in investment following a reduction in import protection. On the other hand, higher markup firms lower investment more aggressively following reductions in tariffs and import license coverage on final goods.
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Format: | Journal Article biblioteca |
Language: | en_US |
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Oxford University Press on behalf of the World Bank
2012-06-01
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Subjects: | Bond; cash flow; developing countries; domestic market; economic efficiency; emerging economies; exporters; foreign debt; foreign exchange; foreign market; import costs; International Bank; international trade; investment choice; investment decisions; market efficiency; oil boom; Trade Liberalization; trade protection; trading, |
Online Access: | http://hdl.handle.net/10986/16354 |
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dig-okr-10986163542021-04-23T14:03:28Z Trade Liberalization and Investment : Firm-level Evidence from Mexico Kandilov, Ivan T. Leblebicioğlu, Aslı Bond; cash flow; developing countries; domestic market; economic efficiency; emerging economies; exporters; foreign debt; foreign exchange; foreign market; import costs; International Bank; international trade; investment choice; investment decisions; market efficiency; oil boom; Trade Liberalization; trade protection; trading Plant-level panel data from Mexico's Annual Industrial Survey is employed to evaluate the impact of reductions in tariffs and import license coverage on final goods, as well as intermediates, on firms'investment decisions. Using data from 1984 to 1990, a period during which a large scale trade liberalization occurred, a dynamic investment equation is estimated using the system-GMM estimator developed by Arellano and Bover (1995) and Blundell and Bond (1998). Consistent with theory, the empirical analyses show that a reduction in import protection on final goods leads to lower plant-level investment, whereas reductions in tariffs and import license coverage on intermediate inputs result in higher investment. Also, firms with larger import costs experience a larger increase in investment following a reduction in import protection. On the other hand, higher markup firms lower investment more aggressively following reductions in tariffs and import license coverage on final goods. 2013-12-04T18:14:09Z 2013-12-04T18:14:09Z 2012-06-01 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/16354 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Oxford University Press on behalf of the World Bank Journal Article Mexico |
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Banco Mundial |
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Estados Unidos |
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biblioteca |
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America del Norte |
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Biblioteca del Banco Mundial |
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Bond; cash flow; developing countries; domestic market; economic efficiency; emerging economies; exporters; foreign debt; foreign exchange; foreign market; import costs; International Bank; international trade; investment choice; investment decisions; market efficiency; oil boom; Trade Liberalization; trade protection; trading Bond; cash flow; developing countries; domestic market; economic efficiency; emerging economies; exporters; foreign debt; foreign exchange; foreign market; import costs; International Bank; international trade; investment choice; investment decisions; market efficiency; oil boom; Trade Liberalization; trade protection; trading |
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Bond; cash flow; developing countries; domestic market; economic efficiency; emerging economies; exporters; foreign debt; foreign exchange; foreign market; import costs; International Bank; international trade; investment choice; investment decisions; market efficiency; oil boom; Trade Liberalization; trade protection; trading Bond; cash flow; developing countries; domestic market; economic efficiency; emerging economies; exporters; foreign debt; foreign exchange; foreign market; import costs; International Bank; international trade; investment choice; investment decisions; market efficiency; oil boom; Trade Liberalization; trade protection; trading Kandilov, Ivan T. Leblebicioğlu, Aslı Trade Liberalization and Investment : Firm-level Evidence from Mexico |
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Plant-level panel data from Mexico's Annual Industrial Survey is employed to evaluate the impact of reductions in tariffs and import license coverage on final goods, as well as intermediates, on firms'investment decisions. Using data from 1984 to 1990, a period during which a large scale trade liberalization occurred, a dynamic investment equation is estimated using the system-GMM estimator developed by Arellano and Bover (1995) and Blundell and Bond (1998). Consistent with theory, the empirical analyses show that a reduction in import protection on final goods leads to lower plant-level investment, whereas reductions in tariffs and import license coverage on intermediate inputs result in higher investment. Also, firms with larger import costs experience a larger increase in investment following a reduction in import protection. On the other hand, higher markup firms lower investment more aggressively following reductions in tariffs and import license coverage on final goods. |
format |
Journal Article |
topic_facet |
Bond; cash flow; developing countries; domestic market; economic efficiency; emerging economies; exporters; foreign debt; foreign exchange; foreign market; import costs; International Bank; international trade; investment choice; investment decisions; market efficiency; oil boom; Trade Liberalization; trade protection; trading |
author |
Kandilov, Ivan T. Leblebicioğlu, Aslı |
author_facet |
Kandilov, Ivan T. Leblebicioğlu, Aslı |
author_sort |
Kandilov, Ivan T. |
title |
Trade Liberalization and Investment : Firm-level Evidence from Mexico |
title_short |
Trade Liberalization and Investment : Firm-level Evidence from Mexico |
title_full |
Trade Liberalization and Investment : Firm-level Evidence from Mexico |
title_fullStr |
Trade Liberalization and Investment : Firm-level Evidence from Mexico |
title_full_unstemmed |
Trade Liberalization and Investment : Firm-level Evidence from Mexico |
title_sort |
trade liberalization and investment : firm-level evidence from mexico |
publisher |
Oxford University Press on behalf of the World Bank |
publishDate |
2012-06-01 |
url |
http://hdl.handle.net/10986/16354 |
work_keys_str_mv |
AT kandilovivant tradeliberalizationandinvestmentfirmlevelevidencefrommexico AT leblebiciogluaslı tradeliberalizationandinvestmentfirmlevelevidencefrommexico |
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1756573163214340096 |