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Deep Trade Agreements and Firm Ownership in GVCs

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  • Egger,Peter H.
  • Masllorens,Gerard

Abstract

This paper focuses on the effect of preferential trade agreements and their depth on firmownership, in particular, along global value chains. It measures shareholder-affiliate ownership links at thecountry-sector-pair level to discern between vertical and horizontal links. The findings show that preferential tradeagreements boost vertical international investment links (both backward and forward) while reducing horizontalinvestment. Deep preferential trade agreements stimulate investment particularly for sector pairs, where a high inputspecificity prevails.

Suggested Citation

  • Egger,Peter H. & Masllorens,Gerard, 2023. "Deep Trade Agreements and Firm Ownership in GVCs," Policy Research Working Paper Series 10321, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10321
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    References listed on IDEAS

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    1. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, December.
    2. Gene M. Grossman & Phillip McCalman & Robert W. Staiger, 2021. "The “New” Economics of Trade Agreements: From Trade Liberalization to Regulatory Convergence?," Econometrica, Econometric Society, vol. 89(1), pages 215-249, January.
    3. Aaditya Mattoo & Nadia Rocha & Michele Ruta & Aaditya Mattoo, 2020. "Handbook of Deep Trade Agreements," World Bank Publications - Books, The World Bank Group, number 34055.
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