A General Equilibrium Analysis of the Interplay between Foreign Direct Investment and Trade Adjustments

Hiro Lee and Dominique van der Mensbrugghe ()

No 119, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: The theoretical literature on trade and foreign direct investment (FDI) indicates that they could be either substitutes or complements. The empirical evidence on U.S.-Japan and Asia-Pacific Economic Cooperation (APEC) countries suggests that trade and FDI exhibit a complementary relationship. In this paper, we employ a multi-region, multisectoral computable general equilibrium (CGE) model that incorporates FDI to evaluate the impact of APEC trade and investment liberalization on economic welfare and the interplay between FDI and trade adjustments.

Keywords: APEC liberalization; foreign direct investment; CGE model (search for similar items in EconPapers)
JEL-codes: F13 F15 F21 O53 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2001-03, Revised 2001-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:kob:dpaper:119

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