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Trade Liberalization, International Relocation of Firms, and Economic Growth

Author

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  • Johdo, Wataru

    (Tokyo Keizai University, Tokyo, Japan)

Abstract

This paper presents a framework for understanding the role of global tariff rate reductions in affecting the world growth rate, given knowledge spillovers in research and development (R&D) and the relocation of firms. In particular, we highlight one aspect of the model: the international relocation of firms associated with a reduction in world tariff rates. This paper shows that, given the spillover effect of localized R&D knowledge, a simultaneous multilateral reduction in the common tariff rate increases the world growth rate through the relocation of firms.

Suggested Citation

  • Johdo, Wataru, 2024. "Trade Liberalization, International Relocation of Firms, and Economic Growth," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 39(2), pages 508-523.
    • Handle: RePEc:ris:integr:0910
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    Cited by:

    1. Wataru Johdo, 2025. "Agglomeration and non-agglomeration countries and the growth effects of protectionist trade policies," International Economics and Economic Policy, Springer, vol. 22(1), pages 1-15, February.

    More about this item

    Keywords

    tariffs; knowledge spillovers; R&D; international relocation of firms; endogenous growth;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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