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Multinational production and investment provisions in preferential trade agreements

Miroudot, Sébastien and Rigo, Davide (2021) Multinational production and investment provisions in preferential trade agreements. Journal of Economic Geography. ISSN 1468-2702

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Identification Number: /10.1093/jeg/lbab031

Abstract

Using a novel database on multinational production (MP), this article investigates the impact of preferential trade agreements on foreign affiliates’ production activities. We find that trade agreements with investment provisions have a positive effect on MP. On average, signing an agreement including investment provisions is associated with increased MP up to 26% in the manufacturing sector and 34% in the services sector. Our findings suggest that investment provisions increase MP by facilitating multinationals operations in foreign markets, especially for activities requiring the proximity of suppliers and consumers, and by helping multinationals joining global value chains.

Item Type: Article
Official URL: https://academic.oup.com/joeg
Additional Information: © 2021 The Authors
Divisions: Geography & Environment
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HG Finance
H Social Sciences > HD Industries. Land use. Labor
JEL classification: F - International Economics > F1 - Trade > F14 - Country and Industry Studies of Trade
F - International Economics > F1 - Trade > F15 - Economic Integration
F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
Date Deposited: 06 Oct 2021 14:06
Last Modified: 17 Nov 2021 01:16
URI: http://eprints.lse.ac.uk/id/eprint/112199

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