The EU, investment protection and TTIP

peer-reviewe

What’s the use of a transatlantic free trade area?

peer-reviewe

Trade Policy Formation when Geography Matters for Specialisation

In this paper, trade policy formation is incorporated into an economic geography model. The political setup used is a modi- fied version of that introduced by Grossman and Helpman (1994) in which policy makers may be influenced by lobbying contributions. On the basis of the underlying trade framework, lobbying activity is performed in benefit of capital interests. Optimal policy outcomes indicate that the largest countries and countries that are disadvantaged by trade regulation favour trade liberalisation. Moreover, the optimal domestic policy is more open to trade when the local and global competition facing domestic firms is less fierce, the welfare dependency on manufacturing imports is larger and when there is a more intense preference for variety in consumption. It is shown that lobbying in‡uence on policy is increasing in the concentration of capital ownership in the population. It is also revealed that, in the cases when domestic special and general interests do not coincide, lobbying activity is performed to liberalise trade. In addition, this actually implies that the presence of lobbying in‡uence on policy raises the long-run national welfare.Economic Geography, International Specialisation, NationalWelfare, Lobbying Contributions, Market Access Reciprocity

What’s the use of a transatlantic free trade area? Jean Monnet Policy Brief 05/2013

No abstract

Effects of corruption on foreign direct investment : evidence from Swedish multinational enterprises

In this paper, we provide novel evidence on the adjustment of multinational enterprises (MNEs) to corrupt environments. We examine if the corruption barrier to entry is reduced by corruption experience (i.e., previous investment in a corrupt system) using a rich enterprise data set on Swedish manufacturers’ activities in the 1997–2015 period. A mixed logit model, which accounts for enterprise-specific market substitution patterns, is used to ensure the accuracy of estimates. Our findings show that a strong deterrent effect of corruption is counteracted by corruption experience, which implies that MNEs learn to adjust to reduce corruption entry costs. Multinational enterprises that acquire corruption experience gain a competitive advantage over other enterprises.peer-reviewe

The Arab Spring in Comparative Perspective

peer-reviewe

Endogenous trade policies, the location of production and inter-industry input-output linkages. *

Abstract This paper explores the role of trade policy in a new economic geography model based on intermediate input linkages within as well as between industries. In

Essays on Endogenous Trade Policies

This thesis consists of a collection of essays on endogenous trade policies and may briefly be summarized as follows. The first essay empirically examines determinants of bilateral trade protection originating from normative trade theory, endogenous trade-policy studies, and political arguments put forward in the public debate. Overall protection level measures are constructed and the data sample includes a total of 426 trade relations. The maximum likelihood estimation results provide strong empirical support for five of the seven tested determinants, and since no omitted variable problem can be detected, the empirical model appears to incorporate all the factors functioning as determinants at the time of observation. The explanatory variables revealed to influence the bilateral protection level are the import penetration level of goods produced by the trade partner, the share of imports from the trade partner characterised by intra-industry trade, and dummy variables capturing if the trade relation is characterized by the joint bilateral customs union participation, a rich importing country and a middle-income exporting country or a large importing country and a small exporting country. A performed sensitivity analysis shows that the results appear to be unaffected by multicollinearity and endogeneity as well as omitted variable problems. The second essay theoretically examines the economic role of trade policy in a Krugman and Venables (1995) model modified to allow for country-specific trade cost levels and incorporate trade costs in the homogenous goods sector. Specifically, unilateral trade-cost effects on the equilibrium structure are identified and the resulting national welfare consequences obtained in order to identify the endogenous trade-policy positions when trade policies are used as strategies in a game between benevolent governments. It is revealed that the existence of trade costs in the homogenous goods sector has a considerable influence on equilibrium structure effects of differentiated goods trade policies and, hence, on equilibrium strategies in differentiated goods trade. In particular, the identified equilibrium strategies in the differentiated goods sector incorporate substantially lower protection levels when homogenous goods trade costs are allowed for. Moreover, it is shown that the identified policy equilibria always generate locational equilibria characterised by a complete international dispersion of production. The third essay is theoretical and explores the economic role of trade policy in a new economic geography model based on intermediate input linkages within as well as between sectors. Specifically, the effects of unilateral trade policies on the international production and trade pattern are identified in a Krugman and Venables (1996) model modified to allow for asymmetric trade cost levels across sectors and countries. Moreover, national welfare effects of these policies are examined and the trade-policy determination is endogenised in a trade-policy game between benevolent governments. It is revealed that the presence of inter-industry input-output linkages between firms imposes counteracting effects on the international production and trade pattern. Furthermore, it is shown that the equilibrium strategies are normally free-trade policy positions and that locational equilibria generated from the game can be characterised either by a complete international specialisation of production or a complete international dispersion of industry categories

Trade policy formation when geography matters for specialisation

In this paper, trade policy formation is incorporated into an economic geography model. The political setup used is a modified version of that introduced by Grossman and Helpman (1994) in which policy makers may be influenced by lobbying contributions. On the basis of the underlying trade framework, lobbying activity is performed in benefit of capital interests. Optimal policy outcomes indicate that the largest countries and countries that are disadvantaged by trade regulation favour trade liberalisation. Moreover, the optimal domestic policy is more open to trade when the local and global competition facing domestic firms is less fierce, the welfare dependency on manufacturing imports is larger and when there is a more intense preference for variety in consumption. It is shown that lobbying influence on policy is increasing in the concentration of capital ownership in the population. It is also revealed that, in the cases when domestic special and general interests do not coincide, lobbying activity is performed to liberalise trade. In addition, this actually implies that the presence of lobbying influence on policy raises the long-run national welfare