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Expanding the international trade and investment policy agenda: the role of cities and services

Cote, Christine, Estrin, Saul ORCID: 0000-0002-3447-8593 and Shapiro, Daniel (2020) Expanding the international trade and investment policy agenda: the role of cities and services. Journal of International Business Policy, 3. pp. 199-223. ISSN 2522-0691

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Identification Number: 10.1057/s42214-020-00053-x


We explore the public policy implications of two new, significant, and inter-related global phenomena. First, the rising share of services, particularly innovation-driven digital and knowledge-based services, in foreign trade and multinational enterprise activity; and second, the increasingly important role of global cities as home and hosts to these activities. Our framework distinguishes between national economic policies to promote trade and FDI, referred to as economic diplomacy, and comparable policies originating in cities, referred to as city diplomacy. National economic diplomacy has traditionally promoted trade and investment in goods, often through trade agreements and promotion agencies, and we explore the limitations of these tools as trade in services becomes more important. However, we also note that trade in services, particularly innovation-driven services, is concentrated in global cities, and traded between them, often within MNEs. We conclude that national policies on trade and investment cannot be divorced from innovation and knowledge strategies, and that these strategies cannot be divorced from cities. We emphasize that national economic diplomacy should be better aligned with city diplomacy. We also discuss how the transition to stronger city diplomacy may have consequences for firms and their strategies for corporate diplomacy.

Item Type: Article
Official URL:
Additional Information: © 2020 Academy of International Business
Divisions: Management
Subjects: J Political Science > JZ International relations
H Social Sciences > HF Commerce
Date Deposited: 06 Apr 2020 23:11
Last Modified: 20 Jan 2022 19:03

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