[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ias/cpaper/21-wp615.html
   My bibliography  Save this paper

Economic Impacts of Investment Facilitation

Author

Listed:
  • Edward J. Balistreri
  • Zoryana Olekseyuk
Abstract
We quantify the impacts of a potential Investment Facilitation Agreement (IFA) given the outcomes of the structured discussions. The analysis is based on an innovative multi-region general equilibrium simulation model including bilateral representative firms. Consideration is given to Foreign Direct Investment (FDI) and monopolistic competition. The model shows empirically relevant gains associated with removal of investment barriers. The expected global welfare gains range between 0.56% and 1.74% depending on the depth of a potential IFA. The benefits are concentrated among the members with the highest welfare increase for the low and middle income countries. Notable spillovers accrue to non-participants, which can be increased by joining the agreement. Our results contribute to the relatively scarce research on investment facilitation and provide policy makers with information on the potential effects of an IFA.

Suggested Citation

  • Edward J. Balistreri & Zoryana Olekseyuk, 2021. "Economic Impacts of Investment Facilitation," Center for Agricultural and Rural Development (CARD) Publications 21-wp615, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:cpaper:21-wp615
    as

    Download full text from publisher

    File URL: https://www.card.iastate.edu/products/publications/pdf/21wp615.pdf
    File Function: Full Text
    Download Restriction: no
    File URL: https://www.card.iastate.edu/products/publications/synopsis/?p=1318
    File Function: Online Synopsis
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jesper Jensen & David Tarr, 2008. "Impact of Local Content Restrictions and Barriers Against Foreign Direct Investment in Services: The Case of Kazakhstan's Accession to the World Trade Organization," Eastern European Economics, Taylor & Francis Journals, vol. 46(5), pages 5-26, September.
    2. Edward J. Balistreri & David G. Tarr & Hidemichi Yonezawa, 2015. "Deep Integration in Eastern and Southern Africa: What are the Stakes?," Journal of African Economies, Centre for the Study of African Economies, vol. 24(5), pages 677-706.
    3. Balistreri, Edward J. & Rutherford, Thomas F., 2013. "Computing General Equilibrium Theories of Monopolistic Competition and Heterogeneous Firms," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1513-1570, Elsevier.
    4. Edward J. Balistreri & Christoph Böhringer & Thomas F. Rutherford, 2018. "Quantifying Disruptive Trade Policies," CESifo Working Paper Series 7382, CESifo.
    5. Balistreri, Edward J. & Jensen, Jesper & Tarr, David, 2015. "What determines whether preferential liberalization of barriers against foreign investors in services are beneficial or immizerising: Application to the case of Kenya," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 9, pages 1-134.
    6. Burfisher,Mary E., 2011. "Introduction to Computable General Equilibrium Models," Cambridge Books, Cambridge University Press, number 9780521766968, December.
    7. Jesper Jensen & David Tarr, 2014. "Deep Trade Policy Options for Armenia: The Importance of Trade Facilitation, Services and Standards Liberalization," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 19, pages 453-508, World Scientific Publishing Co. Pte. Ltd..
    8. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    9. Robert C. Feenstra, 2010. "Measuring the gains from trade under monopolistic competition," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(1), pages 1-28, February.
    10. Edward J. Balistreri & Zoryana Olekseyuk & David G. Tarr, 2017. "Privatisation and the unusual case of Belarusian accession to the WTO," The World Economy, Wiley Blackwell, vol. 40(12), pages 2564-2591, December.
    11. Burfisher,Mary E., 2011. "Introduction to Computable General Equilibrium Models," Cambridge Books, Cambridge University Press, number 9780521139779, December.
    12. Angel Aguiar & Maksym Chepeliev & Erwin L. Corong & Robert McDougall & Dominique van der Mensbrugghe, 2019. "The GTAP Data Base: Version 10," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 4(1), pages 1-27, June.
    13. Fukui, Tani & Csilla Lakatos, 2012. "A Global Database of Foreign Affiliate Sales," GTAP Research Memoranda 4009, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Berger, Axel & Bolmer, Ann-Margret & Gitt, Florian & Olekseyuk, Zoryana & Metz, Marius & Robardet, Guillaume & Schäfer, Julia & Schneider, Marie-Lisa & Schönberg, Frank, 2023. "Implementation of the WTO Investment Facilitation for development agreement: Identification of reform needs and development policy measure," IDOS Policy Briefs 7/2023, German Institute of Development and Sustainability (IDOS), Bonn.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Balistreri, Edward J. & Tarr, David G., 2020. "Comparison of deep integration in the Melitz, Krugman and Armington models: The case of The Philippines in RCEP," Economic Modelling, Elsevier, vol. 85(C), pages 255-271.
    2. Zoryana Olekseyuk, 2016. "Modeling of FDI in business services: Additional effects in case of Ukraine's European integration," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(7), pages 1010-1043, October.
    3. Veronika Movchan & Thomas F. Rutherford & David G. Tarr & Hidemichi Yonezawa, 2023. "The importance of deep integration in preferential trade agreements: the case of a successfully implemented Ukraine–Turkey free trade agreement," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 159(1), pages 1-50, February.
    4. Balistreri, Edward J. & Tarr, David G., 2017. "Market Structure and the impact of RCEP in The Philippines: What are the Differences between Melitz, Krugman and Armington Models," Conference papers 332835, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Latorre, María C. & Olekseyuk, Zoryana & Yonezawa, Hidemichi, 2017. "Trade and FDI-related impacts of Brexit," Conference papers 332876, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Zoryana Olekseyuk, 2015. "The EU-Ukraine Deep and Comprehensive Free Trade Agreement and the importance of FDI," EcoMod2015 8391, EcoMod.
    7. Edward J Balistreri & Maryla Maliszewska & Israel Osorio-Rodarte & David G Tarr & Hidemichi Yonezawa, 2018. "Poverty, Welfare and Income Distribution Implications of Reducing Trade Costs Through Deep Integration in Eastern and Southern Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 27(2), pages 172-200.
    8. Olekseyuk, Zoryana, 2015. "The EU-Ukraine Deep and Comprehensive Free Trade Agreement and the Importance of FDI," Conference papers 332588, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Costinot, Arnaud & Rodríguez-Clare, Andrés, 2014. "Trade Theory with Numbers: Quantifying the Consequences of Globalization," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 197-261, Elsevier.
    10. Christoph Boehringer & Edward Balistreri & Thomas Rutherford, 2018. "Quantifying Disruptive Trade Policies," Working Papers V-415-18, University of Oldenburg, Department of Economics, revised Nov 2018.
    11. María C. Latorre & Zoryana Olekseyuk & Hidemichi Yonezawa, 2020. "Foreign multinationals in service sectors: A general equilibrium analysis of Brexit," The World Economy, Wiley Blackwell, vol. 43(11), pages 2830-2859, November.
    12. Edward J. Balistreri & Zoryana Olekseyuk & David G. Tarr, 2017. "Privatisation and the unusual case of Belarusian accession to the WTO," The World Economy, Wiley Blackwell, vol. 40(12), pages 2564-2591, December.
    13. Nilsson, Lars, 2019. "Reflections on the economic modelling of free trade agreements," DG TRADE Chief Economist Notes 2019-2, Directorate General for Trade, European Commission.
    14. Miriam Frey & Zoryana Olekseyuk, 2014. "A general equilibrium evaluation of the fiscal costs of trade liberalization in Ukraine," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(3), pages 505-540, August.
    15. Li, Minghao & Balistreri, Edward J. & Zhang, Wendong, 2020. "The U.S.–China trade war: Tariff data and general equilibrium analysis," Journal of Asian Economics, Elsevier, vol. 69(C).
    16. Latorre, María C., 2016. "A CGE Analysis of the Impact of Foreign Direct Investment and Tariff Reform on Female and Male Workers in Tanzania," World Development, Elsevier, vol. 77(C), pages 346-366.
    17. Dixon, Peter B. & Jorgenson, Dale W., 2013. "Introduction," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1-22, Elsevier.
    18. Zhou, Jing & Latorre, María C., 2014. "How FDI influences the triangular trade pattern among China, East Asia and the U.S.? A CGE analysis of the sector of Electronics in China," Economic Modelling, Elsevier, vol. 44(S1), pages 77-88.
    19. Jaewon Jung, 2018. "Introducing Roy-like Worker Assignment into Computable General Equilibrium Models," THEMA Working Papers 2018-06, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    20. Edward J. Balistreri & David G. Tarr, 2019. "Mathematics of the Armington, Krugman and Melitz Models with Multiple Sectors and Heterogeneous Regions, with Detailed Derivations," Center for Agricultural and Rural Development (CARD) Publications 19-wp596, Center for Agricultural and Rural Development (CARD) at Iowa State University.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ias:cpaper:21-wp615. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/caiasus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.