Multinational production and investment provisions in preferential trade agreements

Intra-industry foreign direct investment

Sébastien Miroudot and Davide Rigo

Journal of Economic Geography, 2022, vol. 22, issue 6, 1275-1308

Abstract: Using a novel database on multinational production (MP), this article investigates the impact of preferential trade agreements on foreign affiliates’ production activities. We find that trade agreements with investment provisions have a positive effect on MP. On average, signing an agreement including investment provisions is associated with increased MP up to 26% in the manufacturing sector and 34% in the services sector. Our findings suggest that investment provisions increase MP by facilitating multinationals operations in foreign markets, especially for activities requiring the proximity of suppliers and consumers, and by helping multinationals joining global value chains.

Keywords: Preferential trade agreements; multinational production; investment provisions; foreign affiliates; global value chains (search for similar items in EconPapers)
JEL-codes: F14 F15 F23 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:oup:jecgeo:v:22:y:2022:i:6:p:1275-1308.

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