Rules of origin (RoO) are legitimate policy instruments to prevent trade deflection in a Preferential Trade Agreement (PTA) short of a customs union. Yet, when captured by special interest groups, RoO can restrict trade beyond what is needed to prevent trade deflection. By how much do political...

During the last two decades we simultaneously observed an important increase in investment abroad and a rush towards free-trade worldwide. This paper argues that the former may (partially) help explain the latter. In a model of endogenous determination of trade protection through lobbying, where...

Non-transparency is a term given in this paper to a set of government policies that increase the risk and uncertainty faced by economic actors (foreign investors). The higher in risk and uncertainty stem from the presence of bribery and corruption, unstable economic policies, weak and poorly...

We use a general equilibrium model of a small developing economy with urban unemployment to illustrate the impact of processing incentives in the presence of foreign owned factors of production. We show that the location of the processing industry plays a crucial role in determining whether or...

For 106 countries over 1969-2004, this paper revisits the relationship between openness, education and economic growth using the System Generalized Method of Moment (GMM) approach. Trade and growth are usually positively correlated and capital formation appears to be an important channel through...

This paper examines international trade and foreign direct investment as channels for technology diffusion among industrialized countries. We find strong empirical support for capital goods trade as a channel for international technology diffusion and some evidence that multinational enterprises...

Technology diffusion across industrial countries has been the subject of considerable research. During the last decade economists have measured extensively the extent to which productivity gains are transmitted across countries in the North. However, research on technology diffusion to...

This paper is exploring the impact on the two proximate economies, Korea and China, of China’s accession to the World Trade Organization. We try to figure out how the aggregate effects, export performance, domestic production, and flows of foreign direct investments can be affected by this...

This paper uses a simple gravity model of bilateral FDI flows to assess the commonly heard assertion that FDI inflows into transition economics in Central ad Eastern Europe have been disppointingly low. The results show that the amounts of overseas investment bY EU countries in the more advanced...

This paper investigates the relationship between FDI and trade in the Asia-Pacific economies by examining the bilateral flows of trade and FDI in a cross-sectional study. The estimation results based on the gravity model show a significant and positive relationship between trade and FDI,...