Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123096
Authors: 
Balistreri, Edward J.
Jensen, Jesper
Tarr, David
Year of Publication: 
2015
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 9 [Issue:] 2015-42 [Pages:] 1-134
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 the 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
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Article

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