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Location Choice

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  • S Van Wijnbergen
  • Anthony J. Venables

Abstract

Much of the excitement around the North American Free Trade Agreement (NAFTA) has been generated by anticipations of a strongly foreign investment response. Nevertheless, the plethora of applied papers about the NAFTA have all either ignored DFI or kept it exogenous. In this paper we provide support, with empirical underpinning, for the anticipation of a strong DFI response; however this support is qualified by the demonstration that no such DFI response will be forthcoming unless the NAFTA is used to drastically reform the agriculture and services sectors in Mexico.

Suggested Citation

  • S Van Wijnbergen & Anthony J. Venables, 1993. "Location Choice," CEP Discussion Papers dp0177, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp0177
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    References listed on IDEAS

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    1. Magnus Blomström & Ari Kokko & Mario Zejan, 2000. "Multinational Corporations and Productivity Convergence in Mexico," Palgrave Macmillan Books, in: Foreign Direct Investment, chapter 9, pages 134-159, Palgrave Macmillan.
    2. Roland-Holst, David & Reinert, Kenneth A. & Shiells, Clinton R., 1994. "NAFTA liberalization and the role of nontariff barriers," The North American Journal of Economics and Finance, Elsevier, vol. 5(2), pages 137-168.
    3. Levy, Santiago & van Wijnbergen, Sweder, 1992. "Transition problems in economic reform : agriculture in the Mexico - U.S. free trade agreement," Policy Research Working Paper Series 967, The World Bank.
    4. Levy, Santiago & Wijnbergen, Sweder van, 1994. "Labor markets, migration and welfare Agriculture in the North-American Free Trade Agreement," Journal of Development Economics, Elsevier, vol. 43(2), pages 263-278, April.
    5. Magnus Blomstrom & Robert E. Lipsey & Lennart Ohlsson, 1989. "What Do Rich Countries Trade with Each Other? R&D and the Composition of U.S. and Swedish Trade," NBER Working Papers 3140, National Bureau of Economic Research, Inc.
    6. Lawrence F. Katz & Lawrence H. Summers, 1989. "Industry Rents: Evidence and Implications," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1989 Micr), pages 209-290.
    7. Krugman, Paul & Venables, Anthony J, 1990. "Integration and the Competitiveness of Peripheral Industry," CEPR Discussion Papers 363, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Mathan Satchi & Jonathan Temple, 2006. "Growth and labour markets in developing countries," Bristol Economics Discussion Papers 06/581, School of Economics, University of Bristol, UK.
    2. Mathan Satchi & Jonathan Temple, 2009. "Labor Markets and Productivity in Developing Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 183-204, January.
    3. Aaron Tornell & Gerardo Esquivel Hernández, 1997. "The Political Economy of Mexico's Entry into NAFTA," NBER Chapters, in: Regionalism versus Multilateral Trade Arrangements, pages 25-56, National Bureau of Economic Research, Inc.
    4. Robin Boadway & Michael Keen, 2009. "Theoretical Perspectives On Resource Tax Design," Working Paper 1206, Economics Department, Queen's University.

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    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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