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Impact of Local Content Restrictions and Barriers Against Foreign Direct Investment in Services: The Case of Kazakhstan's Accession to the World Trade Organization

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  • Jesper Jensen
  • David Tarr

Abstract

We employ a computable general equilibrium model of the Kazakh economy to assess the effect of accession to the World Trade Organization (WTO). Our model incorporates foreign direct investment by multinational business service providers and by multinational oil and gas companies; it contains endogenous productivity effects in both goods and services markets through a Dixit-Stiglitz (1977) framework. Our model is innovative in that we assess the effect of local content provisions for multinational oil and gas companies, provisions that are highly contentious in WTO accession negotiations. We show that our model features are crucial to the results, as the estimated gains are more than ten times larger than the gains from a constant return-to-scale model.

Suggested Citation

  • Jesper Jensen & David Tarr, 2008. "Impact of Local Content Restrictions and Barriers Against Foreign Direct Investment in Services: The Case of Kazakhstan's Accession to the World Trade Organization," Eastern European Economics, Taylor & Francis Journals, vol. 46(5), pages 5-26, September.
    • Handle: RePEc:mes:eaeuec:v:46:y:2008:i:5:p:5-26
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    Citations

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    Cited by:

    1. Vinokurov, Evgeny & Libman, Alexander, 2012. "Post-Soviet Integration Breakthrough. Why the Customs Union Has More Chances Than Its Predecessors," MPRA Paper 62026, University Library of Munich, Germany.
    2. Georges, Patrick & Mérette, Marcel, 2011. "Trade Diversification Away from the U.S. or North American Customs Union? A Review of Canada’s Trade Policy Options," Conference papers 332084, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Veronika Movchan & Thomas F. Rutherford & David G. Tarr & Hidemichi Yonezawa, 2023. "The importance of deep integration in preferential trade agreements: the case of a successfully implemented Ukraine–Turkey free trade agreement," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 159(1), pages 1-50, February.
    4. Edward J. Balistreri & Zoryana Olekseyuk, 2021. "Economic Impacts of Investment Facilitation," Center for Agricultural and Rural Development (CARD) Publications 21-wp615, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    5. Balistreri, Edward J. & Olekseyuk, Zoryana & Tarr, David G., 2016. "The Impact of WTO Accession and Complementary Structural Reforms on the Economy of Belarus: A Quantitative Evaluation," Conference papers 332696, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Edward J. Balistreri & Zoryana Olekseyuk & David G. Tarr, 2017. "Privatisation and the unusual case of Belarusian accession to the WTO," The World Economy, Wiley Blackwell, vol. 40(12), pages 2564-2591, December.
    7. Tarr, David G., 2013. "Putting Services and Foreign Direct Investment with Endogenous Productivity Effects in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 303-377, Elsevier.
    8. Olekseyuk, Zoryana, 2015. "The EU-Ukraine Deep and Comprehensive Free Trade Agreement and the Importance of FDI," Conference papers 332588, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. World Bank, 2016. "Assessing the Impact of WTO Accession on Belarus," World Bank Publications - Reports 24698, The World Bank Group.
    10. Zoryana Olekseyuk, 2015. "The EU-Ukraine Deep and Comprehensive Free Trade Agreement and the importance of FDI," EcoMod2015 8391, EcoMod.
    11. Zoryana Olekseyuk, 2016. "Modeling of FDI in business services: Additional effects in case of Ukraine's European integration," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(7), pages 1010-1043, October.
    12. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2013. "Computable General Equilibrium Modeling of Market Access in Services," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1601-1643, Elsevier.
    13. Francisco G. Carneiro, 2013. "What Promises Does the Eurasian Customs Union Hold for the Future?," World Bank Publications - Reports 17034, The World Bank Group.

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