IDEAS home Printed from https://ideas.repec.org/a/oec/ecokaa/5lmqcr2jgw7g.html
   My bibliography  Save this article

The Influence of Policies on Trade and Foreign Direct Investment

Author

Listed:
  • Stephen S. Golub
  • Dana Hajkova
  • Daniel Mirza
  • Giuseppe Nicoletti
  • Kwang-Yeol Yoo

Abstract

This paper assesses the importance of border and non-border policies for global economic integration. The focus is on four widely-advocated policies: removing explicit restrictions to trade and FDI; promoting domestic competition; improving the adaptability of labour markets; and ensuring adequate levels of infrastructure capital. The analysis covers FDI and trade in both goods and services, thus aiming to account for the most important channels of globalisation and dealing with most modes of cross-border services supply. The results highlight that, despite extensive liberalisation over the past two decades, there is scope for further reducing policy barriers to integration of OECD markets. Remaining barriers have a significant impact on bilateral trade and FDI, with anticompetitive domestic regulations and restrictive labour market arrangements estimated to curb integration as much as explicit trade and FDI restrictions. Simulating the removal of such barriers suggests that the quantitative effects of further liberalisation of trade, FDI and domestic product and labour markets on global integration could be substantial...

Suggested Citation

  • Stephen S. Golub & Dana Hajkova & Daniel Mirza & Giuseppe Nicoletti & Kwang-Yeol Yoo, 2003. "The Influence of Policies on Trade and Foreign Direct Investment," OECD Economic Studies, OECD Publishing, vol. 2003(1), pages 7-83.
  • Handle: RePEc:oec:ecokaa:5lmqcr2jgw7g
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1787/eco_studies-v2003-art2-en
    Download Restriction: Full text available to READ online. PDF download available to OECD iLibrary subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. Christian Dreger & Manuel Artís & Rosina Moreno & Raúl Ramos & Jordi Suriñach, 2007. "Study on the feasibility of a tool to measure the macroeconomic impact of structural reforms," European Economy - Economic Papers 2008 - 2015 272, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Gerda Dewit & Holger Görg & Yama Temouri, 2013. "Employment Protection and Relocation with Firm Heterogeneity," Economics, Finance and Accounting Department Working Paper Series n234-13.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    3. Conway, P. & Lysenko, T. & Barnard, G., 2011. "Product Market Regulation in Russia," Journal of the New Economic Association, New Economic Association, issue 10, pages 95-124.
    4. Petr Mariel & Susan Orbe & Carlos Rodríguez, 2009. "The Knowledge-Capital Model Of Fdi: A Time Varying Coefficients Approach," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(2), pages 196-212, May.
    5. Dewit, Gerda & Görg, Holger & Temouri, Yama, 2018. "Employment protection and firm relocation: Theory and evidence," Kiel Working Papers 2102, Kiel Institute for the World Economy (IfW).
    6. Mariel Chladkova, Petr & Orbe Mandaluniz, Susan & Rodríguez González, Carlos, 2007. "A time varying coefficient model for panel data: Foreign Direct Investment in European OECD countries," BILTOKI 2007-03, Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística).
    7. Götz Zeddies, 2011. "Determinants of international fragmentation of production in European Union," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 38(4), pages 511-537, November.
    8. repec:wfo:wstudy:59183 is not listed on IDEAS
    9. Roberto Basile & Luigi Benfratello & Davide Castellani, 2005. "Attracting Foreign Investments in Europe - are Italian Regions Doomed?," ERSA conference papers ersa05p148, European Regional Science Association.
    10. Dewit, Gerda & Leahy, Dermot & Montagna, Catia, 2012. "Employment Protection, Flexibility and Firms’ Strategic Location Decisions under Uncertainty," SIRE Discussion Papers 2012-24, Scottish Institute for Research in Economics (SIRE).
    11. Henk Kox & Hildegunn Kyvik Nordås, 2007. "Services Trade and Domestic Regulation," OECD Trade Policy Papers 49, OECD Publishing.
    12. Crozet, Matthieu & Milet, Emmanuel & Mirza, Daniel, 2016. "The impact of domestic regulations on international trade in services: Evidence from firm-level data," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 585-607.
    13. Roy Nixon, 2007. "Improving the investment climate in APEC economies," Economic Roundup, The Treasury, Australian Government, issue 1, pages 51-66, February.
    14. Roberto Basile & Luigi Benfratello & Davide Castellani, 2005. "Attracting Foreign Direct Investments in Europe: Are Italian Regions Doomed?," Rivista di Politica Economica, SIPI Spa, vol. 95(1), pages 319-319, January-F.
    15. Fabienne Boudier & Julie Lochard, 2013. "How do Cross-Border Mergers and Acquisitions Answer to Deregulation in Services?," The World Economy, Wiley Blackwell, vol. 36(11), pages 1424-1441, November.
    16. Bianka Dettmer, 2012. "The European Union's service directive: Contrasting ex ante estimates with empirical evidence," Jena Economic Research Papers 2012-019, Friedrich-Schiller-University Jena.
    17. José De Sousa & Julie Lochard, 2004. "The currency union effect on trade and the FDI channel," Cahiers de la Maison des Sciences Economiques j04111, Université Panthéon-Sorbonne (Paris 1).
    18. Jos Jansen & Ad Stokman, 2011. "International Business Cycle Comovement: Trade and Foreign Direct Investment," DNB Working Papers 319, Netherlands Central Bank, Research Department.
    19. Bianka Dettmer, 2012. "Business services outsourcing and economic growth: Evidence from a dynamic panel data approach," Jena Economic Research Papers 2012-049, Friedrich-Schiller-University Jena.
    20. Dewit, Gerda & Görg, Holger & Temouri, Yama, 2018. "Employment Protection and Firm Relocation: Theory and Evidence," IZA Discussion Papers 11500, Institute for the Study of Labor (IZA).
    21. Gerda Dewit & Dermot Leahy & Catia Montagna, 2013. "Employment Protection, Flexibility and Firms' Strategic Location Decisions under Uncertainty," Economica, London School of Economics and Political Science, vol. 80(319), pages 441-474, July.
    22. Jean-Marc Fournier, 2015. "The negative effect of regulatory divergence on foreign direct investment," OECD Economics Department Working Papers 1268, OECD Publishing.

    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:oec:ecokaa:5lmqcr2jgw7g. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/oecddfr.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.