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Services Tradability, Trade Liberalization and Foreign Direct Investment

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  • van Marrewijk, Charles
  • Stibora, Joachim
  • de Vaal, Aldert

Abstract

The authors analyze a two-country, general equilibrium model. The countries are identical, except for the existence of an efficiently operating market for producer services in one country, which allows it to gain cost advantages by using differentiated services as an intermediate input in the production process. Foreign manufacturers can only use these if there is international exchange in services products or services technology. The welfare effects of liberalizing trade in services are mixed. Not only the distinction between trade in services output and foreign direct investment is important, but also the specific mode by which foreign direct investment is conducted. Copyright 1996 by The London School of Economics and Political Science.

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Bibliographic Info

Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 63 (1996)
Issue (Month): 252 (November)
Pages: 611-31

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Handle: RePEc:bla:econom:v:63:y:1996:i:252:p:611-31

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Cited by:
  1. Carolina Lennon, 2009. "Trade in Services and Trade in Goods: Differences and Complementarities," wiiw Working Papers 53, The Vienna Institute for International Economic Studies, wiiw.
  2. repec:hal:wpaper:halshs-00586223 is not listed on IDEAS
  3. Júlia Pereira & Rui Rijo & João Leão, 2009. "Internal relocation of Contact Centers and its impact on customer relationship," Working Papers 49, globADVANTAGE, Polytechnic Institute of Leiria.
  4. van Marrewijk, Charles & Stibora, Joachim & de Vaal, Albert & Viaene, Jean-Marie, 1997. "Producer services, comparative advantage, and international trade patterns," Journal of International Economics, Elsevier, vol. 42(1-2), pages 195-220, February.

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