The Effects of Preferential Trade Agreements on Foreign Direct Investment: Evidence from the African Caribbean Pacific Region

In this paper we add to a relatively small literature on FDI in the ACP group by focusing on the role of PTAs in attracting FDI. Our empirical analysis utilises panel data on bilateral FDI stocks from 34 OECD countries into 45 ACP countries over the period 2000-2012. This bilateral specification allows us to control for country pair policy variables such as the presence of a PTA, a double tax treaty or a bilateral investment treaty between the OECD source and ACP host country, along with other important explanatory variables identified in the literature. We conclude the prevalence of market seeking FDI in the ACP group, with an important role for regional integration in providing access to surrounding market potential. Aggregation of countries in our sample masks regional differences. We find that in the Caribbean a PTA, with or without investment provisions, has no significant effect on FDI, regardless of whether a BIT is in place. In Africa, however, we find that a bilateral PTA with investment provisions, with or without a BIT, reduces FDI; and a bilateral PTA without investment provisions does the same, unless a bilateral BIT is in place, in which case FDI increases. This reinforces a view that the investment provisions in a BIT and a PTA are somehow aimed at different types of investments

Explaining International Differences in the Prices of Tradables and Non-Tradables (with a New Zealand Perspective)

The World Bank's International Comparison Program (ICP) data on national price levels for tradables and non-tradables (and goods compared to services) reveals that New Zealand has relatively high prices of both tradables and non-tradables when compared to a sample of over 40 OECD-Eurostat countries (Gemmell, 2013). The present paper seeks to explain both those observed international variations in non-tradables and tradables prices in general, and New Zealand's especially high prices in particular

Current economic trends in selected South Pacific countries, 1991

World economic developments in 1991 have been unfavourable for the South Pacific countries

Trade, Quality Reputations and Commercial Policy.

This paper extends recent developments on the role of firm reputations in markets where product quality is unobservable at the time of purchase to an international trading context. Its primary motivation is to demonstrate the implications of this approach to the problem of quality uncertainty for commercial policy, particularly the role of potential nontariff barriers, such as origin labeling requirements and minimum quality standards. Copyright 1989 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.