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How Does Protectionist Trade Policy Interact with FDI?

Author

Listed:
  • Kim, Jongduk

    (Korea Institute for International Economic Policy)

  • Cho, Moonhee

    (Korea Institute for International Economic Policy)

Abstract

In this study, we investigate the question whether importing countries’ implementation of protective trade measures, such as antidumping duties, leads to changes in foreign direct investment from trading partners. That is, we examine the prevalence of “ADP-jumping FDI” across countries. We use more recent and organized non-tariff measure data provided by the WTO I-TIP and Ghodsi et al. (2017), which can be matched with other trade-related variables. Using econometrically sensible identification strategies, the Tobit and the Heckman two-stage selection models, we find out that ADP-jumping FDI to importing countries prevails rather consistently around the world. These results are also consistent with those using Poisson and linear fixed effects models.

Suggested Citation

  • Kim, Jongduk & Cho, Moonhee, 2019. "How Does Protectionist Trade Policy Interact with FDI?," Working Papers 19-10, Korea Institute for International Economic Policy.
    • Handle: RePEc:ris:kiepwp:2019_010
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    More about this item

    Keywords

    Foreign direct investment; Antidumping policy; trade policy; Tariffjumping;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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