Journal Article

Trade Liberalization and Investment : Firm-level Evidence from Mexico

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collection.link.102
https://openknowledge.worldbank.org/handle/10986/2211
collection.name.102
A. World Bank Economic Review
dc.contributor.author
Kandilov, Ivan T.
dc.contributor.author
Leblebicioğlu, Aslı
dc.date.accessioned
2013-12-04T18:14:09Z
dc.date.available
2013-12-04T18:14:09Z
dc.date.issued
2012-06-01
dc.date.lastModified
2021-04-23T14:03:28Z
dc.description.abstract
Plant-level panel data from Mexico's Annual Industrial Survey is employed to evaluate the impact of reductions in tariffs and import license coverage on final goods, as well as intermediates, on firms'investment decisions. Using data from 1984 to 1990, a period during which a large scale trade liberalization occurred, a dynamic investment equation is estimated using the system-GMM estimator developed by Arellano and Bover (1995) and Blundell and Bond (1998). Consistent with theory, the empirical analyses show that a reduction in import protection on final goods leads to lower plant-level investment, whereas reductions in tariffs and import license coverage on intermediate inputs result in higher investment. Also, firms with larger import costs experience a larger increase in investment following a reduction in import protection. On the other hand, higher markup firms lower investment more aggressively following reductions in tariffs and import license coverage on final goods.
en
dc.identifier.citation
World Bank Economic Review
dc.identifier.issn
1564-698X
dc.identifier.uri
http://hdl.handle.net/10986/16354
dc.language.iso
en_US
dc.publisher
Oxford University Press on behalf of the World Bank
dc.rights
CC BY-NC-ND 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by-nc-nd/3.0/igo
dc.subject
Bond; cash flow; developing countries; domestic market; economic efficiency; emerging economies; exporters; foreign debt; foreign exchange; foreign market; import costs; International Bank; international trade; investment choice; investment decisions; market efficiency; oil boom; Trade Liberalization; trade protection; trading
dc.title
Trade Liberalization and Investment : Firm-level Evidence from Mexico
en
dc.type
Journal Article
en
okr.date.disclosure
2013-12-04
okr.doctype
Journal Article
okr.globalpractice
Macroeconomics and Fiscal Management
okr.globalpractice
Finance and Markets
okr.globalpractice
Trade and Competitiveness
okr.googlescholar.linkpresent
yes
okr.journal.nbpages
320-349
okr.language.supported
en
okr.peerreview
Academic Peer Review
okr.region.country
Mexico
okr.topic
Finance and Financial Sector Development :: Currencies and Exchange Rates
okr.topic
Finance and Financial Sector Development :: Debt Markets
okr.topic
Finance and Financial Sector Development :: Non Bank Financial Institutions
okr.topic
International Economics and Trade :: Free Trade
okr.topic
International Economics and Trade :: Trade Policy
okr.topic
International Economics and Trade :: Trade and Regional Integration
okr.topic
Macroeconomics and Economic Growth :: Economic Theory & Research
okr.topic
Macroeconomics and Economic Growth :: Investment and Investment Climate
okr.topic
Macroeconomics and Economic Growth :: Political Economy
okr.topic
Private Sector Development :: Emerging Markets
okr.volume
26(2)

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