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Bilateral versus Multilateral Trade and Investment Liberalisation

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Author Info
Peter Egger
Mario Larch
Michael Pfaffermayr

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Abstract

To assess the welfare effects of bilateral versus multilateral trade and/or investment liberalisation in general equilibrium, we set up a three-country and three-factor knowledge-capital model of trade and multinational activity. Numerical simulation results indicate that multilateral liberalisation tends to dominate bilateral liberalisation in welfare terms. A transition economy tends to prefer bilateral over multilateral liberalisation to avoid plant relocation. For similar reasons, a developed country may prefer bilateral over multilateral liberalisation, if the other economies exhibit big relative factor endowment differences. Copyright 2007 The Authors
Journal compilation 2007 Blackwell Publishing Ltd .

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File URL: http://www.blackwell-synergy.com/links/doi/10.1111/j.1467-9701.2007.01005.x
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Publisher Info
Article provided by Blackwell Publishing in its journal World Economy.

Volume (Year): 30 (2007)
Issue (Month): 4 (04)
Pages: 567-596
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Handle: RePEc:bla:worlde:v:30:y:2007:i:4:p:567-596

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  1. Fritz Breuss, . "Globalization, EU Enlargement and Income Distribution," FIW Working Paper series 008, FIW. [Downloadable!]
  2. Fritz Breuss, 2007. "Globalization, EU Enlargement and Income Distribution," WIFO Working Papers 296, WIFO. [Downloadable!]
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This page was last updated on 2009-12-19.

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