Trade Liberalization and Delocalization: New Evidence from Firm-Level Panel Data
AbstractThe authors examine how U.S. multinational corporations (MNCs) and their Canadian affiliates responded to the substantial bilateral tariff reductions that occurred over the 1983-92 period. Using confidential firm-level data from the Bureau of Economic Analysis, they focus on the MNCs' allocation of employment and capital across Canada and the United States. The authors find that Canadian affiliate employment and assets were negatively correlated with Canadian tariff rates, a pattern that contradicts the notion that Canadian tariff reductions would lead to a 'hollowing out' of Canadian manufacturing. They also find evidence of substantial heterogeneity in MNCs' responses to tariff changes, even within narrowly defined industries.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 31 (1998)
Issue (Month): 4 (November)
Contact details of provider:
Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
Web page: http://economics.ca/cje/
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Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F10 - International Economics - - Trade - - - General
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- Marcel Mérette & Evangelia Papadaki & Jorge Hernandez & Yu Lan, 2008. "Foreign Direct Investment Liberalization Between Canada and the USA: A CGE Investigation," Atlantic Economic Journal, International Atlantic Economic Society, vol. 36(2), pages 195-209, June.
- Michael P. Keane & Susan E. Feinberg, 2006. "Accounting for the Growth of MNC-Based Trade Using a Structural Model of U.S. MNCs," American Economic Review, American Economic Association, vol. 96(5), pages 1515-1558, December.
- Mukherjee, Arijit & Suetrong, Kullapat, 2012. "Trade cost reduction and foreign direct investment," Economic Modelling, Elsevier, vol. 29(5), pages 1938-1945.
- Kjell Erik Lommerud & Frode Meland & Lars Sørgard, 2002.
"Unionized Oligopoly, Trade Liberalization and Location Choice,"
CESifo Working Paper Series
777, CESifo Group Munich.
- Kjell Erik Lommerud & Frode Meland & Lars S¯rgard, 2003. "Unionised Oligopoly, Trade Liberalisation and Location Choice," Economic Journal, Royal Economic Society, vol. 113(490), pages 782-800, October.
- Lommerud, Kjell Erik & Meland, Frode & Sørgard, Lars, 2001. "Unionized Oligopoly, Trade Liberalization and Location Choice," CEPR Discussion Papers 2990, C.E.P.R. Discussion Papers.
- John Britton, 2002. "Regional Implications of North American Integration: A Canadian Perspective on High Technology Manufacturing," Regional Studies, Taylor & Francis Journals, vol. 36(4), pages 359-374.
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