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Trade liberalization in services: Investor responses to NAFTA’s cross-border trucking provisions

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  • Ronald B. Davies
  • Benjamin H. Liebman
  • Kasaundra Tomlin

Abstract

We investigate the response of US trucking firms to the removal of barriers to cross-border trucking under NAFTA. This was done via a program implemented in 2007, cancelled in 2009, and reinstated in 2011. We use a model of endogenous exporting to show that this can arise from incorrect expectations of import competition. We find that, unsurprisingly, the program’s start resulted in lower stock returns, particularly for border firms. However, later policy changes indicate that investors, and particularly those investing in US multinationals, viewed the pilot as beneficial.

Suggested Citation

  • Ronald B. Davies & Benjamin H. Liebman & Kasaundra Tomlin, 2019. "Trade liberalization in services: Investor responses to NAFTA’s cross-border trucking provisions," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 28(8), pages 935-959, November.
    • Handle: RePEc:taf:jitecd:v:28:y:2019:i:8:p:935-959
    DOI: 10.1080/09638199.2019.1610473
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    Cited by:

    1. Shadrack Muthami Mwatu & Charity Kageni Mbaka & John Gakuu Karanja & Grace Mukami Muriithi, 2024. "Trade Agreements, Technical Regulations, and Standards: Competitiveness Implications for Kenyan Exporters to European Union," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(2), pages 381-410, April.

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