Preferential trade areas, multinational enterprises, and welfare

Priya Ranjan
Authors registered in the RePEc Author Service: Priyaranjan Jha

Canadian Journal of Economics, 2006, vol. 39, issue 2, 493-515

Abstract: The effects of preferential trade areas (PTAs) on the investments by multinational enterprises and their implications for the welfare of members and non-members are studied in a model with two types of firms: national firms and multinational firms. In the presence of multinational activity PTAs can create new investment as well as divert investment from non-members to members. Both affect the welfare of members positively. More interestingly, if the investment creation effect of a PTA is sufficiently strong, then the PTA could be welfare enhancing for non-members as well.

JEL-codes: F2 L1 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (2)

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