Deep Trade Agreements and FDI in Partial and General Equilibrium
This paper quantifies the relationships between deep trade liberalization and foreign direct investment. To this end, it focuses on the effects of deep trade agreements. The analysis relies on a structural framework that simultaneously enables (i) estimating the direct impact of deep trade agreements on foreign direct investment, (ii) translating the partial deep trade agreement estimates into general equilibrium effects on foreign direct investment; and (iii) obtaining partial deep trade agreement effects on trade and quantifying the impact of deep trade agreements on foreign direct investment through trade. The paper obtains sizeable, positive, and statistically significant estimates of the effects of deep trade agreements on both trade and foreign direct investment. A counterfactual analysis suggests that together with direct and indirect channels deep trade agreements have contributed.
| Main Authors: | , |
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| Format: | Working Paper biblioteca |
| Language: | English English |
| Published: |
World Bank, Washington, DC
2023-03
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| Subjects: | FOREIGN DIRECT INVESTMENT (FDI), TRADE LIBERALIZATION, DEEP TRADE, DEEP TRADE AGREEMENTS, |
| Online Access: | http://documents.worldbank.org/curated/en/099905303012343392/IDU0806e214f0558104e9509204065b6826b43ea https://openknowledge.worldbank.org/handle/10986/39494 |
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