IDEAS home Printed from https://ideas.repec.org/a/bla/reviec/v14y2006i2p316-329.html

Investment under Trade Policy Uncertainty: an Empirical Investigation

Author

Listed:
  • Sasatra Sudsawasd
  • Robert E. Moore

Abstract

The link between trade policy uncertainty and the share of investment in GDP per capita is investigated using panel data drawn from over a hundred countries for the period 1960–2000. Five indicators of trade policy are used. Two specifications of volatility for each of the trade policy indicators are constructed as measures of trade policy uncertainty. Panel regression results suggest a robust correlation between the volatility of trade policy indicators and the investment share. A significant negative impact of trade policy volatility on the investment share is found in most trade policy indicators with an exception—the volatility of the trade share indicator more closely associated with volatility in quantity than in prices has a significant positive impact on the investment share.

Suggested Citation

  • Sasatra Sudsawasd & Robert E. Moore, 2006. "Investment under Trade Policy Uncertainty: an Empirical Investigation," Review of International Economics, Wiley Blackwell, vol. 14(2), pages 316-329, May.
    • Handle: RePEc:bla:reviec:v:14:y:2006:i:2:p:316-329
    DOI: 10.1111/j.1467-9396.2006.00578.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-9396.2006.00578.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-9396.2006.00578.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Rodrik, Rani, 1995. "Trade and industrial policy reform," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 45, pages 2925-2982, Elsevier.
    2. repec:umd:umdeco:rodriguez9901 is not listed on IDEAS
    3. Anne O. Krueger, 1978. "Foreign Trade Regimes and Economic Development: Liberalization Attempts and Consequences," NBER Books, National Bureau of Economic Research, Inc, number krue78-1, January.
    4. Dean, J.M. & Desai, S. & Riedel, J., 1994. "Trade Policy Reform in Developing Countries since 1985," World Bank - Discussion Papers 267, World Bank.
    5. Robert E. Baldwin, 1988. "Trade Policy Issues and Empirical Analysis," NBER Books, National Bureau of Economic Research, Inc, number bald88-2, January.
    6. Robert E. Baldwin, 1989. "Measuring Nontariff Trade Policies," NBER Working Papers 2978, National Bureau of Economic Research, Inc.
    7. Francisco Rodríguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sudsawasd, Sasatra, 2010. "An empirical assessment of the relationship between competition policy and investment," Journal of Asian Economics, Elsevier, vol. 21(5), pages 466-475, October.
    2. Gnangnon, Sèna Kimm, 2022. "Duration of WTO Membership and Investment-Oriented Remittances Flows," EconStor Preprints 251274, ZBW - Leibniz Information Centre for Economics.
    3. Gnangnon, Sèna Kimm, 2020. "Tariff Volatility and Tariff Policy in Developed and Developing Countries," EconStor Preprints 223302, ZBW - Leibniz Information Centre for Economics.
    4. Li, Mengzhe & Lin, Qianru & Lan, Fei & Zhan, Zhimin & He, Zhongshi, 2023. "Trade policy uncertainty and financial investment: Evidence from Chinese energy firms," Energy Economics, Elsevier, vol. 117(C).
    5. Zhang, Hailiang & Li, Yao & Wang, Haijun & Yin, Lei, 2025. "Expansion or retrenchment: Corporate investment reactions to external security risks," Research in International Business and Finance, Elsevier, vol. 73(PA).
    6. Wang, Hui & Shen, Huayu & Tang, Xiaoyi & Wu, Zuofeng & Ma, Shuming, 2021. "Trade policy uncertainty and firm risk taking," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 351-364.
    7. Gnangnon, Sèna Kimm, 2021. "WTO membership, the membership duration and the utilization of non-reciprocal trade preferences offered by the QUAD Countries," EconStor Preprints 247265, ZBW - Leibniz Information Centre for Economics.
    8. Kexuan Zhou & Linhui Yu & Xinlin Jiang & Sanjay Kumar, 2023. "The impact of regional trade policy uncertainty on the productivity of Chinese export enterprises: The case of China–ASEAN Free Trade Area," Pacific Economic Review, Wiley Blackwell, vol. 28(2), pages 218-240, May.
    9. Gnangnon, Sèna Kimm, 2023. "Duration of membership in the world trade organization and investment-oriented remittances inflows," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 258-277.
    10. Zhou, Kexuan & Kumar, Sanjay & Yu, Linhui & Jiang, Xinlin, 2021. "The economic policy uncertainty and the choice of entry mode of outward foreign direct investment: Cross-border M&A or Greenfield Investment," Journal of Asian Economics, Elsevier, vol. 74(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Måns Söderbom & Francis Teal, 2003. "Openness and human capital as sources of productivity growth: An empirical investigation," CSAE Working Paper Series 2003-06, Centre for the Study of African Economies, University of Oxford.
    2. Maria Cipollina & Luca Salvatici, 2008. "Measuring Protection: Mission Impossible?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 577-616, July.
    3. Mr. Andrew Berg & Anne O. Krueger, 2003. "Trade, Growth, and Poverty: A Selective Survey," IMF Working Papers 2003/030, International Monetary Fund.
    4. Derek Headey, 2007. "What Professor Rodrik Means by Policy Reform: Appraising a Post-Washington Paradigm," CEPA Working Papers Series WP052007, School of Economics, University of Queensland, Australia.
    5. Yanikkaya, Halit, 2003. "Trade openness and economic growth: a cross-country empirical investigation," Journal of Development Economics, Elsevier, vol. 72(1), pages 57-89, October.
    6. Francis Teal & Måns Söderbom, 2003. "Openness and Human Capital as Sources of Productivity Growth: An Empirical Investigation," Economics Series Working Papers WPS/2003-06, University of Oxford, Department of Economics.
    7. Shafaeddin, Mehdi, 2010. "Trade liberalization, industrialization and development; experience of recent decades," MPRA Paper 26355, University Library of Munich, Germany.
    8. Arribas, Iván & Bensassi, Sami & Tortosa-Ausina, Emili, 2020. "Trade integration in the European Union: Openness, interconnectedness, and distance," The North American Journal of Economics and Finance, Elsevier, vol. 52(C).
    9. Iti Vyas, 2020. "Whether the Economic Growth of India is Trade Openness Led?," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 8(1), pages 38-53.
    10. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, vol. 48(2), pages 419-447, March.
    11. Turan Subasat, 2003. "Does the Dollar Index Really Measure Outward Orientation?," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(3), pages 309-326.
    12. Renelt, David, 1991. "Economic growth : a review of the theoretical and empirical literature," Policy Research Working Paper Series 678, The World Bank.
    13. Simon Guttmann & Anthony Richards, 2006. "Trade Openness: An Australian Perspective," Australian Economic Papers, Wiley Blackwell, vol. 45(3), pages 188-203, September.
    14. Kaplan, Muhittin & Aslan, Alper, 2006. "Türki̇ye’Ni̇n Dişa Açilma Oraninin Ölçümü, 1965-1995," MPRA Paper 10603, University Library of Munich, Germany.
    15. Patrick PLANE & Mohamed CHAFFAI, 2006. "Total Factor Productivity of Tunisia’s manufacturing sectors: measurement, determinants and convergence towards OECD countries," Working Papers 200622, CERDI.
    16. Hoekman, Bernard, 2011. "Changing Developing Country Trade Policies and WTO Engagement," CEPR Discussion Papers 8210, C.E.P.R. Discussion Papers.
    17. Arvind Panagariya, 2003. "Alternative Approaches to Measuring the Cost of Protection," International Trade 0308002, University Library of Munich, Germany.
    18. B. Bosworth & S. M. Collins & Y. Chen, "undated". "Accounting for Difference in Economic Growth," Discussion Papers 115, Brookings Institution International Economics.
    19. Kim, Euysung, 2000. "Trade liberalization and productivity growth in Korean manufacturing industries: price protection, market power, and scale efficiency," Journal of Development Economics, Elsevier, vol. 62(1), pages 55-83, June.
    20. Andriamananjara, Shuby & Nash, John, 1997. "Have trade policy reforms led to greater openness in developing countries : evidence from readily available trade data," Policy Research Working Paper Series 1730, The World Bank.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:reviec:v:14:y:2006:i:2:p:316-329. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.