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Linkages amongst Foreign Direct Investment, Trade and Trade Policy: An Economic Analysis with Applications to the Food Sector

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  • Wilson, Norbert L.W.

Abstract

Our models show that, in OECD countries, tariffs and domestic support, which raise domestic market input prices, can have an effect on how FDI is distributed geographically. FDI may be used to jump tariffs. Investors in a home country may invest in a host country to exploit the preferential tariffs, as from an RTA, which the host has with a third country. Domestic support to agriculture, an input sector into the food sector, can encourage outward investment and discourage inward investment. FDI and trade appear to complement one another. Therefore, policies that open trade may increase FDI and vice versa.

Suggested Citation

  • Wilson, Norbert L.W., 2006. "Linkages amongst Foreign Direct Investment, Trade and Trade Policy: An Economic Analysis with Applications to the Food Sector," 2006 Annual meeting, July 23-26, Long Beach, CA 21064, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea06:21064
    DOI: 10.22004/ag.econ.21064
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    References listed on IDEAS

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    Cited by:

    1. Marilyne Huchet-Bourdon & Anna Lipchitz & Audrey Rousson, 2009. "Aid for Trade in Developing Countries: Complex Linkages for Real Effectiveness," African Development Review, African Development Bank, vol. 21(2), pages 243-290.
    2. Wilson, Norbert L.W., 2007. "What a Difference a Day Makes: An Estimate of Potential Gains from Trade Facilitation," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9958, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Boubacar, Inoussa, 2016. "Spatial determinants of U.S. FDI and exports in OECD countries," Economic Systems, Elsevier, vol. 40(1), pages 135-144.

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