Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/111474
Year of Publication: 
2015
Series/Report no.: 
Economics Discussion Papers No. 2015-47
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
Despite the fact that many modern preferential trade agreements include commitments to foreign investors in imperfectly competitive services sectors, the literature has not established conditions under which these agreements are beneficial or harmful. The authors fill that void by developing a model with monopolistic competition and foreign direct investment in services with Dixit-Stiglitz endogenous productivity effects from additional varieties. They specify a numerical model, with probability distributions of all parameters. The model is executed 30,000 times, and results are reported as probability of an outcome, based on the sample distribution. In order to ground the results in reality, the authors apply the model to Kenya. They show that preferential commitments in services could be immizerising. Losses are more likely the greater the share of initial rent capture on the services barriers in our home country and the more technologically advanced are the excluded regions relative to the partner region.
Subjects: 
immizerising services liberalization
preferential liberalization
multinationals
monopolistic competition
foreign direct investment
endogenous productivity effects
JEL: 
F12
F13
F14
F15
F23
F47
C68
L16
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.