Regional trade integration and multinational firm strategies / Pol Antràs, C. Fritz Foley.
Material type:
TextSeries: Working paper series (National Bureau of Economic Research) ; no. 14891.Publication details: Cambridge, Mass. : National Bureau of Economic Research, 2009Description: 27, [9] p. : ill. ; 22 cmSubject(s): ASEAN | Trade blocs | International trade -- Econometric models | United States -- Commerce -- Southeast Asia -- Econometric modelsLOC classification: HB1 | .N38 no. 14891Online resources: Click here to access online Summary: This paper analyzes the effects of the formation of a regional trade agreement on the level and nature of multinational firm activity. We examine aggregate data that captures the response of U.S. multinational firms to the formation of the ASEAN free trade agreement. Observed patterns guide the development of a model in which heterogeneous firms from a source country decide how to serve two foreign markets. Following a reduction in tariffs on trade between the two foreign countries, the model predicts growth in the number of source-country firms engaging in foreign direct investment, growth in the size of affiliates that are active in reforming countries both before and after the tariff reduction, and an increase in the extent to which the sales of affiliates in reforming countries are directed towards other reforming countries. Analysis of firm-level responses to the creation of the ASEAN free trade agreement yields results that are consistent with these predictions.
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University of Macedonia Library Βιβλιοστάσιο Β (Stack Room B) | Research Papers | HB1.N38 no. 14891 (Browse shelf (Opens below)) | 1 | Available | 0013125379 |
Includes bibliographical references.
This paper analyzes the effects of the formation of a regional trade agreement on the level and nature of multinational firm activity. We examine aggregate data that captures the response of U.S. multinational firms to the formation of the ASEAN free trade agreement. Observed patterns guide the development of a model in which heterogeneous firms from a source country decide how to serve two foreign markets. Following a reduction in tariffs on trade between the two foreign countries, the model predicts growth in the number of source-country firms engaging in foreign direct investment, growth in the size of affiliates that are active in reforming countries both before and after the tariff reduction, and an increase in the extent to which the sales of affiliates in reforming countries are directed towards other reforming countries. Analysis of firm-level responses to the creation of the ASEAN free trade agreement yields results that are consistent with these predictions.
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