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Preferential trade areas, multinational enterprises, and welfare

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Author Info
Priya Ranjan

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Abstract

The effects of preferential trade areas (PTAs) on the investments by multinational enterprises and their implications for the welfare of members and non-members are studied in a model with two types of firms: national firms and multinational firms. In the presence of multinational activity PTAs can create new investment as well as divert investment from non-members to members. Both affect the welfare of members positively. More interestingly, if the investment creation effect of a PTA is sufficiently strong, then the PTA could be welfare enhancing for non-members as well.

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File URL: http://economics.ca/cgi/xms?jab=v39n2/07.pdf
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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 39 (2006)
Issue (Month): 2 (May)
Pages: 493-515
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Handle: RePEc:cje:issued:v:39:y:2006:i:2:p:493-515

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Find related papers by JEL classification:
F2 - International Economics - - International Factor Movements and International Business
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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This page was last updated on 2009-10-28.

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