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Foreign Direct Investment in Applied General Equilibrium Models

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Author Info
Arjan Lejour ()
Hugo Rojas-Romagosa ()

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Abstract

Global applied general equilibrium (AGE) models focus on the interactions between regional product markets. Many of these models are developed to represent trade flows and evaluate trade policies. Foreign direct investment (FDI) and foreign commercial presence are ignored in most of them, although sales by foreign affiliates sometimes exceed the value of trade flows. This paper gives an overview of the scarce literature on modelling FDI in AGE models. Modelling options, data availability and simulation results are reviewed. Some conclusions are drawn for future work.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Memoranda with number 169.

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Date of creation: Dec 2006
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Handle: RePEc:cpb:memodm:169

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Related research
Keywords: CGE models; FDI; economic modelling;

Find related papers by JEL classification:
C68 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Computable General Equilibrium Models
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Walmsley, Terrie L., 2002. "Incorporating international ownership of endowments into a global applied general equilibrium model," Economic Modelling, Elsevier, vol. 19(5), pages 679-707, November. [Downloadable!] (restricted)
  2. Hedi Bchir & Yvan Decreux & Jean-Louis Guerin & Sebastien Jean, 2002. "MIRAGE, a Computable General Equilibrium Model for Trade Policy Analysis," Working Papers 2002-17, CEPII research center. [Downloadable!]
  3. Nico van Leeuwen & Arjan Lejour, 2006. "Bilateral Services Trade Data and the GTAP database," CPB Memoranda 160, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  4. James Markusen & Thomas Rutherford & David Tarr, 2005. "Trade and direct investment in producer services and the domestic market for expertise," Canadian Journal of Economics, Canadian Economics Association, vol. 38(3), pages 758-777, August. [Downloadable!] (restricted)
  5. Rutherford, Thomas & Tarr, David & Shepotylo, Oleksandr, 2005. "The impact on Russia of WTO accession and the Doha agenda : the importance of liberalization of barriers against foreign direct investment in services for growth and poverty reduction," Policy Research Working Paper Series 3725, The World Bank. [Downloadable!]
  6. Rutherford, Thomas F, 1999. "Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax," Computational Economics, Springer, vol. 14(1-2), pages 1-46, October. [Downloadable!]
  7. Bruce A. Blonigen, 2005. "A Review of the Empirical Literature on FDI Determinants," NBER Working Papers 11299, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Bernard Hoekman, 2000. "The next round of services negotiations: identifying priorities and options," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 31-52. [Downloadable!]
  9. Wolfgang Keller & Stephen R. Yeaple, 2003. "Multinational Enterprises, International Trade, and Productivity Growth: Firm-Level Evidence from the United States," IMF Working Papers 03/248, International Monetary Fund.
    Other versions:
  10. McKibbin, Warwick J. & Wilcoxen, Peter J., 1998. "The theoretical and empirical structure of the G-Cubed model," Economic Modelling, Elsevier, vol. 16(1), pages 123-148, January. [Downloadable!] (restricted)
    Other versions:
  11. Arjan Lejour & Hugo Rojas-Romagosa & Gerard Verweij, 2007. "Opening Services Markets within Europe: Modelling Foreign Establishments in a CGE Framework," CPB Discussion Papers 80, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
    Other versions:
  12. Bruce Blonigen, 2005. "A Review of the Empirical Literature on FDI Determinants," Atlantic Economic Journal, International Atlantic Economic Society, vol. 33(4), pages 383-403, December. [Downloadable!] (restricted)
  13. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March. [Downloadable!]
  14. Jensen, Jesper & Rutherford, Thomas & Tarr, David, 2004. "The impact of liberalizing barriers to foreign direct investment in services - the case of Russian accession to the World Trade Organization," Policy Research Working Paper Series 3391, The World Bank. [Downloadable!]
    Other versions:
  15. Brown, Drusilla K & Stern, Robert M, 2001. "Measurement and Modeling of the Economic Effects of Trade and Investment Barriers in Services," Review of International Economics, Blackwell Publishing, vol. 9(2), pages 262-86, May. [Downloadable!] (restricted)
    Other versions:
  16. Arjan Lejour & Paul Veenendaal & Gerard Verweij & Nico van Leeuwen, 2006. "Worldscan; a model for international economic policy analysis," CPB Documents 111, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  17. Markusen, James R., 2002. "Multinational Firms and the Theory of International Trade," MPRA Paper 8380, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  18. Nico van Leeuwen & Arjan Lejour, 2006. "Bilateral FDI Stocks by sector," CPB Memoranda 164, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  19. Hugo Rojas-Romagosa, 2006. "Productivity Effects of FDI Inflows: A Literature Review," CPB Memoranda 170, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Arjan Lejour & Hugo Rojas-Romagosa & Gerard Verweij, 2007. "Opening Services Markets within Europe: Modelling Foreign Establishments in a CGE Framework," CPB Discussion Papers 80, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
    Other versions:
  2. Chisari, Omar O. & Maquieyra, Javier & Romero, Carlos A., 2009. "Liberalization of trade in services: A CGE analysis for Argentina, Brazil and Uruguay," MPRA Paper 15336, University Library of Munich, Germany. [Downloadable!]
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