How Does Protectionist Trade Policy Interact with FDI?

Jongduk Kim () and Moonhee Cho ()
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Jongduk Kim: Korea Institute for International Economic Policy, Postal: Building C, Sejong National Research Complex, 370, Sicheong-daero, Sejong-si,Korea, http://www.kiep.go.kr/index.do
Moonhee Cho: Korea Institute for International Economic Policy, Postal: Building C, Sejong National Research Complex, 370, Sicheong-daero, Sejong-si,Korea, http://www.kiep.go.kr/index.do

No 19-10, Working Papers from Korea Institute for International Economic Policy

Abstract: In this study, we investigate the question whether importing countries’ implementation of protective trade measures, such as antidumping duties, leads to changes in foreign direct investment from trading partners. That is, we examine the prevalence of “ADP-jumping FDI” across countries. We use more recent and organized non-tariff measure data provided by the WTO I-TIP and Ghodsi et al. (2017), which can be matched with other trade-related variables. Using econometrically sensible identification strategies, the Tobit and the Heckman two-stage selection models, we find out that ADP-jumping FDI to importing countries prevails rather consistently around the world. These results are also consistent with those using Poisson and linear fixed effects models.

Keywords: Foreign direct investment; Antidumping policy; trade policy; Tariffjumping (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2019-12-30
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepwp:2019_010

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