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Economic Impact of a Potential Investment Facilitation Agreement

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  • Balistreri, Edward J.
  • Berger, Axel
  • Olekseyuk, Zoryana

Abstract

We quantify the impacts of a potential Investment Facilitation Agreement (IFA). The analysis is based on an innovative multi-region general equilibrium simulation model. The model extends the basic GTAPinGAMS structure. The model is calibrated to GTAP 10 (early-release) data characterizing bilateral trade and the social accounts. Consideration is given to Foreign Direct Investment (FDI) and monopolistic competition. The model shows empirically relevant gains associated with removal of investment barriers. Key drivers of the gains are identified in sensitivity analysis. We contribute to the relatively scarce research on investment facilitation and provide policymakers with information on potential effects of a IFA.

Suggested Citation

  • Balistreri, Edward J. & Berger, Axel & Olekseyuk, Zoryana, 2019. "Economic Impact of a Potential Investment Facilitation Agreement," Conference papers 333105, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333105
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    References listed on IDEAS

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    1. Bruno Lanz & Thomas F Rutherford, 2016. "GTAPinGAMS: Multiregional and Small Open Economy Models," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(2), pages 1-77, December.
    2. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    3. Edward J. Balistreri & David G. Tarr & Hidemichi Yonezawa, 2015. "Deep Integration in Eastern and Southern Africa: What are the Stakes?," Journal of African Economies, Centre for the Study of African Economies, vol. 24(5), pages 677-706.
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