Economic Impacts of Investment Facilitation

Edward Balistreri and Zoryana Olekseyuk

No 333261, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: We quantify the impacts of a potential Investment Facilitation Agreement (IFA) given the outcomes of the structured discussions. The analysis is based on an innovative multi-region general equilibrium simulation model including bilateral representative firms. Consideration is given to Foreign Direct Investment (FDI) and monopolistic competition. The model shows empirically relevant gains associated with removal of investment barriers. The expected global welfare gains range between 0.56% and 1.74% depending on the depth of a potential IFA. The benefits are concentrated among the members with the highest welfare increase for the low and middle income countries. Notable spillovers accrue to non-participants, which can be increased by joining the agreement. Our results contribute to the relatively scarce research on investment facilitation and provide policy makers with information on the potential effects of an IFA.

Keywords: Research; Methods/Statistical; Methods (search for similar items in EconPapers)
Date: 2021
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Working Paper: Economic Impacts of Investment Facilitation (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:333261

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