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Does globalization cause a higher concentration of international trade and investment flows?

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  • Low, Patrick
  • Olarreaga, Marcelo
  • Suarez, Javier

Abstract

It has sometimes been argued that globalization benefits only a small number of countries, and that this leads to greater marginalization of excluded countries. This paper argues that globalization is not necessarily biased towards greater concentration in international trade and investment flows. Marginalization is more likely to be explained by domestic policies in relatively closed countries. The paper shows that among relatively open economies, the concentration of international trade and investment flows has declined over the last two decades, whereas the opposite is true among relatively closed economies. Thus, marginalization is not intrinsic to globalization.

Suggested Citation

  • Low, Patrick & Olarreaga, Marcelo & Suarez, Javier, 1998. "Does globalization cause a higher concentration of international trade and investment flows?," WTO Staff Working Papers ERAD-98-08, World Trade Organization (WTO), Economic Research and Statistics Division.
    • Handle: RePEc:zbw:wtowps:erad9808
    DOI: 10.30875/fd106603-en
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    References listed on IDEAS

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    1. Dollar, David, 1992. "Outward-Oriented Developing Economies Really Do Grow More Rapidly: Evidence from 95 LDCs, 1976-1985," Economic Development and Cultural Change, University of Chicago Press, vol. 40(3), pages 523-544, April.
    2. Mr. James M. Boughton, 1997. "Modeling the World Economic Outlook At the IMF: A Historical Review," IMF Working Papers 1997/048, International Monetary Fund.
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    Cited by:

    1. Grether, Jean-Marie & Olarreaga, Marcelo, 1998. "Preferential and non-preferential trade flows in world trade," WTO Staff Working Papers ERAD-98-10, World Trade Organization (WTO), Economic Research and Statistics Division.
    2. Ozgul Bilici & Erkan Erdil & I. Hakan Yetkiner, 2008. "The Determining Role of EU in Turkey's Trade Flows: A Gravity Model Approach," Working Papers 0806, Izmir University of Economics.
    3. Bernhard G. Gunter & Britni Wilcher, 2020. "Three decades of globalisation: Which countries won, which lost?," The World Economy, Wiley Blackwell, vol. 43(4), pages 1076-1102, April.
    4. Marcela Anzola, 2006. "Países en desarrollo y globalización: ¿Gandores o Perdedores?," Borradores de Investigación 3974, Universidad del Rosario.
    5. Lai, Mingyong & Peng, Shuijun & BAO, Qun, 2006. "Technology spillovers, absorptive capacity and economic growth," China Economic Review, Elsevier, vol. 17(3), pages 300-320.

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    More about this item

    Keywords

    Globalization; international trade and investment flows concentration;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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