Deep Trade Agreements and Firm Ownership in GVCs

Peter Egger and Gerard Masllorens

The World Bank Economic Review, 2024, vol. 38, issue 4, 691-707

Abstract: This paper focuses on the effect of preferential trade agreements and their depth on firm-to-firm ownership, in particular, along global value chains. It measures shareholder–affiliate ownership links at the country-sector-pair level to distinguish between vertical and horizontal links. The findings show that preferential trade agreements boost vertical international investment links (both backward and forward) while reducing horizontal investment. Deep preferential trade agreements stimulate investment particularly for sector pairs, where a high input specificity prevails.

Keywords: PTAs; PTA depth; foreign ownership; foreign direct investment (search for similar items in EconPapers)
Date: 2024
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Working Paper: Deep Trade Agreements and Firm Ownership in GVCs (2023)
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