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Trade Liberalization, Growth, and FDI: A Structural Estimation Framework

Mario Larch (), James Anderson () and Yoto Yotov

Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We develop a structural framework that accounts for and decomposes the relationships between trade, physical capital accumulation, and FDI. As a byproduct, our theory delivers a FDI-gravity system. The FDI-gravity estimates are similar to the corresponding trade indexes, however, we also document some notable differences between them. A counterfactual experiment simulating the effects of trade liberalization between Canada and the EU demonstrates the capabilities of our framework.

JEL-codes: F10 F43 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2017
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