Publication:
Deep Trade Agreements and Vertical FDI: The Devil Is in the Details

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dc.contributor.authorOsnago, Alberto
dc.contributor.authorRocha, Nadia
dc.contributor.authorRuta, Michele
dc.date.accessioned2015-11-05T19:49:31Z
dc.date.available2015-11-05T19:49:31Z
dc.date.issued2015-10
dc.description.abstractRecent data show that the institutional content of preferential trade agreements has evolved over time. Although pre-1990s preferential trade agreements mostly focused on tariff liberalization, recent agreements increasingly contain deep provisions in diverse areas, such as intellectual property rights, investment, and standards. At the same time, there has been a remarkable increase in the internationalization of production through foreign direct investment and outsourcing. This paper employs the AntrĆ s and Helpman (2008) model of contractual frictions and global sourcing to study how deep trade agreements affect the international organization of production. The paper constructs new measures of the depth of preferential trade agreements and of vertical foreign direct investment to test the theory. Consistent with the model, the analysis finds evidence that the depth of trade agreements is correlated with vertical foreign direct investment, and that this is driven by the provisions that improve the contractibility of inputs provided by suppliers, such as regulatory provisions. Because this implication of the model is specific to the so-called ā€œproperty rightsā€ theory of the multinational firm, the findings provide empirical support to this approach vis-Ć -vis alternative theories of firm boundaries.en
dc.identifierhttp://documents.worldbank.org/curated/en/2015/10/25225132/deep-trade-agreements-vertical-fdi-devil-details
dc.identifier.doi10.1596/1813-9450-7464
dc.identifier.urihttps://hdl.handle.net/10986/22885
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 7464
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectTARIFFS
dc.subjectMULTILATERAL TRADE
dc.subjectWORLD TRADE ORGANIZATION
dc.subjectINTERNATIONAL ECONOMIC LAW
dc.subjectPRODUCTION
dc.subjectTRADE EFFECTS
dc.subjectFOREIGN DIRECT INVESTMENTS
dc.subjectMULTINATIONAL CORPORATIONS
dc.subjectTRADE STRUCTURE
dc.subjectDISPUTE SETTLEMENT
dc.subjectTRADE RULES
dc.subjectEXPECTATIONS
dc.subjectPROPERTY RIGHTS
dc.subjectGDP PER CAPITA
dc.subjectEXPORTS
dc.subjectDOMESTIC MARKET
dc.subjectPARENT FIRM
dc.subjectPOLITICAL ECONOMY
dc.subjectINCENTIVES
dc.subjectINTELLECTUAL PROPERTY RIGHTS
dc.subjectECONOMIC POLICY
dc.subjectFREE TRADE AGREEMENTS
dc.subjectVARIABLES
dc.subjectPREFERENTIAL MARKET ACCESS
dc.subjectINPUTS
dc.subjectOWNERSHIP
dc.subjectDECISIONS
dc.subjectDUMPING
dc.subjectTREATIES
dc.subjectMARKET ACCESS
dc.subjectFREE TRADE
dc.subjectINTERNATIONAL BANK
dc.subjectPROTECTIONISM
dc.subjectINTERNATIONAL CONTRACTS
dc.subjectFOREIGN INVESTMENTS
dc.subjectBORDER MEASURES
dc.subjectTRADE AGREEMENTS
dc.subjectFINAL GOODS
dc.subjectPRODUCTION PROCESS
dc.subjectCHOICE
dc.subjectGROSS EXPORTS
dc.subjectPREFERENTIAL TRADE AGREEMENTS
dc.subjectLEGAL SYSTEMS
dc.subjectFOREIGN PRODUCTION
dc.subjectTARIFF DATA
dc.subjectEXOGENOUS SHOCKS
dc.subjectGLOBAL ECONOMY
dc.subjectORGANIZATIONAL FORM
dc.subjectMULTINATIONAL FIRM
dc.subjectFOREIGN SUPPLIERS
dc.subjectREDUCTION IN TARIFFS
dc.subjectREGIONAL TRADE
dc.subjectAVERAGE TARIFFS
dc.subjectFIXED COSTS
dc.subjectCUSTOMS
dc.subjectSPECIALIZATION
dc.subjectECONOMETRICS
dc.subjectPRODUCTIVITY
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectCRITERIA
dc.subjectWTO
dc.subjectFOREIGN ASSETS
dc.subjectACCESS
dc.subjectCOUNTERVAILING MEASURES
dc.subjectPROTECTION OF INTELLECTUAL PROPERTY RIGHTS
dc.subjectTRADE POLICY
dc.subjectEXPORT TAXES
dc.subjectTRADE AGREEMENT
dc.subjectRULE OF LAW
dc.subjectECONOMIC RESEARCH
dc.subjectTAXES
dc.subjectMULTILATERAL AGREEMENTS
dc.subjectINTERNATIONAL PRODUCTION
dc.subjectINTERNATIONAL TRADE
dc.subjectREGIONALISM
dc.subjectINTERNATIONAL INVESTMENT
dc.subjectCOMPETITION POLICY
dc.subjectWAGE INEQUALITY
dc.subjectVALUE
dc.subjectCOMPETITIVENESS
dc.subjectFOREIGN DIRECT INVESTMENT
dc.subjectEUROPEAN UNION
dc.subjectPATENTS
dc.subjectMULTILATERAL RULES
dc.subjectINVESTMENT TREATIES
dc.subjectINTERMEDIATEā€ GOODS
dc.subjectMEASUREMENT
dc.subjectINTERNATIONAL AGREEMENTS
dc.subjectECONOMIC LAW
dc.subjectTRADE DIVERSION
dc.subjectMULTINATIONAL FIRMS
dc.subjectPROFITABILITY
dc.subjectLABOR STANDARDS
dc.subjectTRADE DATA
dc.subjectTRADE
dc.subjectMUTUAL RECOGNITION
dc.subjectGDP
dc.subjectGOODS
dc.subjectTHEORY
dc.subjectLEGAL SYSTEM
dc.subjectBILATERAL TRADE
dc.subjectVERTICAL SPECIALIZATION
dc.subjectINVESTMENT
dc.subjectCOMPARATIVE ADVANTAGE
dc.subjectPREFERENTIAL TRADE
dc.subjectTARIFF
dc.subjectWORLD TRADE
dc.subjectFOREIGN OUTSOURCING
dc.subjectINTELLECTUAL PROPERTY
dc.subjectFOREIGN COUNTRY
dc.subjectBILATERAL TRADE DATA
dc.subjectPOLICY RESEARCH
dc.subjectFIXED COST
dc.subjectCOUNTRY OF ORIGIN
dc.subjectINTERMEDIATE INPUTS
dc.subjectTECHNICAL BARRIERS
dc.subjectCONSUMER PROTECTION
dc.subjectDEVELOPMENT POLICY
dc.titleDeep Trade Agreements and Vertical FDIen
dc.title.subtitleThe Devil Is in the Detailsen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleDeep Trade Agreements and Vertical FDI: The Devil is in the Details
okr.date.disclosure2015-10-29
okr.date.doiregistration2025-04-10T10:23:57.623430Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2015/10/25225132/deep-trade-agreements-vertical-fdi-devil-details
okr.guid739621468001166726
okr.identifier.doi10.1596/1813-9450-7464
okr.identifier.externaldocumentum090224b0842b582d_2_0
okr.identifier.internaldocumentum25225132
okr.identifier.reportWPS7464
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/10/29/090224b08317ae54/1_0/Rendered/PDF/Deep0trade0agr0il0is0in0the0details.pdfen
okr.topicTrade Law
okr.topicTrade Policy
okr.topicFree Trade
okr.topicInternational Economics and Trade
okr.topicLaw and Development
okr.topicMacroeconomics and Economic Growth::Economic Theory & Research
okr.unitTrade and Competitiveness Global Practice Group
relation.isAuthorOfPublicationf938bd19-ef80-50c5-9b58-e8429fce3b91
relation.isAuthorOfPublication.latestForDiscoveryf938bd19-ef80-50c5-9b58-e8429fce3b91
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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