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U.S. Multinationals and Preferential Market Access

Author

Listed:
  • Emily Blanchard

    (Tuck School of Business at Dartmouth College)

  • Xenia Matschke

    (Universität Trier)

Abstract

We combine firm-level panel data on U.S. foreign affiliate activity with detailed measures of U.S. trade policy to study the relationship between offshoring and preferential market access. Consistent with theory, we find that trade preferences and offshoring activity are positively and significantly correlated. Using instrumental variables, we estimate that a 10% increase in U.S. foreign affiliate exports to the United States is associated with a 4 percentage point increase in the rate of preferential duty-free access. Restricting attention to the Generalized System of Preferences (GSP) among developing countries, this estimate more than triples, relative to the baseline, full sample results.

Suggested Citation

  • Emily Blanchard & Xenia Matschke, 2015. "U.S. Multinationals and Preferential Market Access," The Review of Economics and Statistics, MIT Press, vol. 97(4), pages 839-854, October.
    • Handle: RePEc:tpr:restat:v:97:y:2015:i:4:p:839-854
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    References listed on IDEAS

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    More about this item

    Keywords

    U.S. trade policy; offshoring; preferential market access; trade preferences; Generalized System of Preferences; exports; duty-free;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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