Balistreri, Edward J.Tarr, David G.2012-03-192012-03-192011-01-01https://hdl.handle.net/10986/3322Given the growing importance of commitments to foreign investors in services in regional trade agreements, it is important to develop applied general equilibrium models to assess the impacts of liberalization of barriers to multinational service providers. This paper develops a 55 sector applied general equilibrium model of Kenya with foreign direct investment and Dixit-Stiglitz productivity effects from additional varieties of imperfectly competitive goods or services, and uses the model to assess its regional and multilateral trade options, focusing on commitments to foreign investors in services. To assess the sensitivity of the results to parameter values, the model is executed 30,000 times, and results are reported as confidence intervals of the sample distributions. The analysis reveals that a 50 percent preferential reduction in the ad valorem equivalents of barriers in all business services by Kenya with its African partners would be somewhat beneficial for Kenya. If a preferential agreement with African partners is combined with an agreement with the European Union, the gains would more than triple the gains of an Africa only agreement. Multilateral reduction of services barriers, however, would yield gains about 12 times the gains of an agreement with the Africa region alone. These results suggest that preferential liberalization in the region is a valuable first step, but wider liberalization, with larger partners and liberal rules of origin or multilaterally, will yield much larger gains due to providing access to a much wider set of services providers. The largest gains would come from domestic regulatory reform in services, as this would almost triple the gains of multilateral liberalization.CC BY 3.0 IGOACCOUNTINGADVANCED COUNTRIESAGGREGATE EXPORTSAGRICULTURAL PRODUCTSAGRICULTUREAIRAVERAGE TARIFFBANK OFFICEBANKING SERVICESBASE YEARBILATERAL FREE TRADE AGREEMENTCAPITAL STOCKCENTRAL ELASTICITIESCENTRAL ELASTICITYCOLLATERALCOLLATERAL REQUIREMENTSCOMMON MARKETCOMPETITIVENESSCONFIDENCECONSTANT ELASTICITY OF TRANSFORMATIONCONSTANT RETURNS TO SCALECOST STRUCTURECOST STRUCTURESCOUNTRY OF ORIGINCREDIT RATINGCUSTOMS UNIONDEBTDEMAND CURVEDEMAND CURVESDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT ECONOMICSDEVELOPMENT INTENSITYDEVELOPMENT POLICYDOMESTIC MARKETDOMESTIC PRODUCTIONDUOPOLYECONOMIC GEOGRAPHYECONOMIC INTEGRATIONECONOMIC REFORMECONOMIC RESEARCHECONOMIC THEORYECONOMICS LITERATUREECONOMIES OF SCALEELASTICITIESELASTICITYELASTICITY OF DEMANDELASTICITY OF SUBSTITUTIONELASTICITY OF SUPPLYELASTICITY VALUESEQUILIBRIUMEXCHANGE RATEEXPORT MARKETEXPORT MARKETSEXPORTSEXTERNALITIESEXTERNALITYFACTORS OF PRODUCTIONFEDERAL RESERVEFEDERAL RESERVE BANKFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL SUPPORTFIRM PERFORMANCEFOREIGN BANKSFOREIGN DIRECT INVESTMENTFOREIGN FIRMSFOREIGN GOODSFOREIGN INVESTMENTFOREIGN INVESTORSFREE ACCESSFREE TRADEFREE TRADE AGREEMENTFREE TRADE AGREEMENTSFREIGHTGDPGENERAL EQUILIBRIUM ANALYSISGENERAL EQUILIBRIUM MODELGLOBALIZATIONGOVERNMENT REGULATIONHOME COUNTRYIMPERFECT COMPETITIONINCOMEINCREASING RETURNSINCREASING RETURNS TO SCALEINITIATIVEINSURANCEINSURANCE MARKETINTERMEDIATE GOODSINTERMEDIATE INPUTSINTERNATIONAL COMPETITIVENESSINTERNATIONAL ECONOMYINTERNATIONAL NEGOTIATIONSINTERNATIONAL TRADEINVESTMENT BARRIERSLAWSLAWYERSLEGAL SYSTEMLESS DEVELOPED COUNTRIESMARGINAL COSTMARGINAL COSTSMARGINAL REVENUEMARKET ACCESSMARKET SHAREMARKET SHARESMOBILE BANKINGMONOPOLISTIC COMPETITIONMONOPOLYMONOPOLY RENTSMULTILATERAL LIBERALIZATIONMULTILATERAL TRADEMULTINATIONALMULTINATIONAL FIRMSMULTINATIONALSMUTUAL RECOGNITIONNATIONAL DEVELOPMENTNONDISCRIMINATORY BARRIERSOPEN ECONOMIESOPEN ECONOMYOPENNESSOPTIMAL TARIFFSPREFERENTIALPREFERENTIAL AGREEMENTPREFERENTIAL AGREEMENTSPREFERENTIAL REDUCTIONPREFERENTIAL TRADEPREFERENTIAL TRADE AGREEMENTSPREFERENTIAL TRADE ARRANGEMENTSPREFERENTIAL TRADE LIBERALIZATIONPRICE INDEXPRIMARY FACTORSPRIVATE SECTOR DEVELOPMENTPRODUCT DIFFERENTIATIONPRODUCTION FUNCTIONPRODUCTIVITYPRODUCTIVITY GROWTHPRODUCTIVITY INCREASESPUBLIC POLICYRAILRAILWAYRAILWAYSREAL ESTATEREAL EXCHANGE RATEREDUCTION OF BARRIERSREFORM PROGRAMREGIONAL INTEGRATIONREGIONAL TRADEREGIONAL TRADE AGREEMENTSREGULATORREGULATORY BARRIERSREGULATORY ENVIRONMENTREGULATORY REGIMEREGULATORY REGIMESREINSURANCEROADRULES OF ORIGINSINGLE MARKETSMALL COUNTRIESSMALL ENTERPRISESSUPPLY CURVESUPPLY CURVESTARIFF DATATARIFF EQUIVALENCETARIFF EQUIVALENTSTARIFF PREFERENCESTARIFF RATETARIFF RATESTARIFF REDUCTIONTARIFF REVENUETAXTECHNOLOGY TRANSFERTELECOMMUNICATIONSTERMS OF TRADETERMS OF TRADE EFFECTSTHIRD WORLDTOTAL FACTOR PRODUCTIVITYTRADE DATATRADE DIVERSIONTRADE FLOWSTRADE LIBERALIZATIONTRADE LOSSESTRADE PARTNERSTRADE POLICIESTRADE POLICYTRANSITION ECONOMIESTRANSMISSION OF KNOWLEDGETRANSPORTTRANSPORT SERVICESTRANSPORTATIONTRANSPORTATION COSTSTRANSPORTATION FACILITIESTRANSPORTATION NETWORKTRANSPORTATION SERVICESTRUEUNILATERAL LIBERALIZATIONUNILATERAL REFORMUNSKILLED LABORURUGUAY ROUNDVALUE OF IMPORTSVALUE OF OUTPUTVARIABLE COSTSVEHICLEWEALTHWEALTH CREATIONWELFARE ECONOMICSWORLD TRADEWORLD TRADE ORGANIZATIONWTOZERO PROFITSZERO TARIFFSWorld Bank10.1596/1813-9450-5552