Foreign Direct Investment in Mexico since the Approval of NAFTA

Cross-country panel data are used to assess the effect of free-tradeagreements on flows of foreign direct investment (FDI). Free-tradeagreements are found to have a significant positive effect onFDI flows, and free-trade agreements are found to matter morefor the smaller members of the agreement. For example, the NorthAmerican Free-Trade Agreement’s (NAFTA) effect on FDIflows into Mexico is much larger than its effect on flows intothe United States. These cross-country results are used to assessNAFTA’s effect on FDI flows into Mexico. After controllingfor a set of other factors—such as an increase in worldwideFDI flows—the trade agreement is found to generate FDIflows nearly 60 percent higher than they would have been withoutthe agreement.     

Price Effects of Preferential Market Access: Caribbean Basin Initiative and the Apparel Sector

Preferential trade arrangements should be evaluated by theireffect on prices rather than by their effect on the total valueof trade. This point is emphasized in the theoretical literaturebut rarely implemented empirically. This article analyzes theU.S. Caribbean Basin Initiative’s (CBI’s) impacton the prices received by eligible apparel exporters. The CBI’sapparel preferences are the most important and heavily usedunilateral preferences because of high trade barriers imposedon exports from the rest of the world. A fixed-effects generalizedleast squares (GLS) estimation is used to isolate the effectsof other factors (such as quality, exchange rates, and transactioncosts) and to identify the effects of tariff preferences. CBIexporters capture only about two-thirds of their preferencemargin despite the high degree of competition among importers.This translates into a 9 percent increase in the relative pricesthey receive, with some variance across countries and years.Countries specializing in higher value items capture more ofthe preference margin, and the implementation of the North AmericanFree Trade Agreement (NAFTA) has a negative effect. RemovingMultifibre Arrangement quotas significantly lowers the benefitsof CBI preferences.     

Migration, Trade, and Foreign Direct Investment in Mexico

Part of the rationale for the North American Free Trade Agreementwas that it would increase trade and foreign direct investment(FDI) flows, creating jobs and reducing migration to the UnitedStates. Since poor data on illegal migration to the United Statesmake direct measurement difficult, data on migration withinMexico, where census data permit careful analysis, are usedinstead to evaluate the mechanism behind predictions on migrationto the United States. Specifications are provided for migrationwithin Mexico, incorporating measures of cost of living, amenities,and networks. Contrary to much of the literature, labor marketvariables enter very significantly and as predicted once possiblecredit constraint effects are controlled for. Greater exposureto FDI and trade deters outmigration, with the effects workingpartly through the labor market. Finally, some tentative inferencesare presented about the impact of increased FDI on Mexico–U.S.migration. On average, a doubling of FDI inflows leads to a1.5–2 percent drop in migration.     

Participation in WTO Dispute Settlement: Complainants, Interested Parties, and Free Riders

What affects a country’s decision of whether to formallyengage in a trade dispute directly related to its exportinginterests? This article empirically examines determinants ofaffected country participation decisions in formal trade litigationarising under the World Trade Organization (wto) between 1995and 2000. It investigates determinants of nonparticipation andexamines whether the incentives generated by the system’srules and procedures discourage active engagement in disputesettlement by developing country members in particular. Thoughthe size of exports at stake is found to be an important economicdeterminant affecting the decision to participate in challengesto a wto-inconsistent policy, the evidence also shows that measuresof a country’s retaliatory and legal capacity as wellas its international political economy relationships matter.These results are consistent with the hypothesis of an implicit"institutional bias" generated by the system’s rules andincentives that particularly affects developing economy participationin dispute settlement.     

中国吸引外资、对外投资和对外贸易:历史与未来

中国已经成为全球外国直接投资的主要接受者,同时也是世界上第二大对外直接投资国。中国希望通过扩大对外直接投资学习先进技术和管理经验,并帮助国内企业分散风险。在改革开放推动下,中国逐步成为一个世界贸易强国,其主要贸易伙伴遍布欧美、东南亚及日本、韩国等,制造业产品在中国对外贸易中占比较大。     

Doha Merchandise Trade Reform: What Is at Stake for Developing Countries?

The LINKAGE model of the global economy and the latest GlobalTrade Analysis Project (GTAP) database (version 6.05) are usedto examine the impact of current merchandise trade barriersand agricultural subsidies and possible reform outcomes of theWorld Trade Organization’s (WTO’s) Doha DevelopmentAgenda. The results suggest that moving to free global merchandisetrade would boost real incomes in Sub-Saharan Africa proportionatelymore than in other developing countries or in high-income countries,despite the terms of trade loss in parts of that region. Particularattention is given to agriculture, as farmers constitute thepoorest households in developing countries but the most assistedin rich countries. Net farm incomes would rise substantiallyin Sub-Saharan Africa and other developing country regions,alleviating rural poverty. Partial liberalization could movethe world some way toward those desirable outcomes, the moreso the more developing countries themselves cut applied tariffs,particularly on agricultural imports.     

Market Access and Welfare under Free Trade Agreements: Textiles under NAFTA

The effective market access granted to textiles and apparelunder the North American Free Trade Agreement (NAFTA) is estimated,taking into account the presence of rules of origin. First,estimates are provided of the effect of tariff preferences combinedwith rules of origin on the border prices of Mexican final goodsexported to the United States and of U.S. intermediate goodsexported to Mexico, based on eight-digit Harmonized System tariff-linedata. A third of the estimated rise in the border price of Mexicanapparel products is found to compensate for the cost of complyingwith NAFTA’s rules of origin, and NAFTA is found to haveraised the price of U.S. intermediate goods exported to Mexicoby around 12 percent, with downstream rules of origin accountingfor a third of that increase. Second, simulations are used toestimate welfare gains for Mexican exporters from preferentialmarket access under NAFTA. The presence of rules of origin isfound to approximately halve these gains.     

人民币国际化与对外投资的内源机制研究

人民币国际化是市场选择的结果,它一般要经历贸易结算功能的国际化、金融交易职能的国际化和价值储备职能的国际化三个阶段。影响人民币国际化进程的主要经济因素归结为四个方面：中国出口贸易规模占全球比重、对外投资额所占全球的比重、金融市场的发达与开放度才及人民币币值的稳定性。人民币的国际化有利于中国对外投资的深入推进,同时中国对外投资的发展能够促进人民币国际化的进程,二者相互影响,相互促进。从对外投资的视角看,为了加快人民币国际化的进程,我国应该在对外投资区域、投资产业及投资方式作出重大的战略调整。     

Distance Still Matters: Evidence from Municipal Bond Underwriting

Using a sample of municipal bond offerings, I find that "local"investment banks have substantial comparative and absolute advantagesover nonlocal counterparts-–locals charge lower fees andsell bonds at lower yields. Local investment banks’ strongestcomparative advantage is at underwriting bonds with higher creditrisk and bonds not rated by rating agencies. These findingssuggest that high-risk bonds and nonrated bonds are more difficultto evaluate and market, and that investment banks with a localpresence are better able to assess "soft" information and placedifficult bond issues.     

The Determinants of Intra-Industry Trade in Insurance Services

In light of the growing significance of trade in financial services, and the emphasis placed on trade in financial services during the Uruguay round of trade negotiations, this article is the first study of the determinants of intra‐industry trade (IIT) in insurance services. The article analyzes and measures the magnitude of IIT in insurance services for the United States. The empirical results of the determinants of IIT indicate that foreign direct investment in insurance services (FDI) is a significant contributor to the volume of trade in insurance services. These empirical findings confirm the new theoretical trade models that, unlike the traditional trade theory that considered trade and foreign direct investment in insurance services as substitutes, trade and FDI complement each other and hence multinational insurance companies are contributing to an increase in the volume of trade in insurance services. Furthermore, this study shows that trade intensity between the United States and its trading partners leads to product differentiation in insurance services and hence an increase in consumer welfare.     

Home country bias: Does domestic experience help investors enter foreign markets?

This paper investigates the dynamics of individuals’ investments leading up to their decision to make the first investment abroad. We show that investors first invest in domestic securities and only some time later they invest abroad in foreign securities. We also show that investors who trade more often in the domestic market start to invest abroad earlier. Our findings suggest that the experience investors acquire while they trade in the domestic market is a key reason why active investors enter the foreign market earlier. A reason is that highly educated investors as well as investors with more financial knowledge, arguably those for whom learning by trading is the least important, do not need to trade as much in the domestic market before they start investing in foreign securities. Another reason is that investors who start investing in foreign securities are able to improve on their performance afterwards. This improvement in performance constitutes further evidence that the home country bias is costly.     

Innovation, Differentiation, and the Choice of an Underwriter: Evidence from Equity-Linked Securities

Investment banks imitate other bank’s innovative corporatesecurities and compete with the innovator to underwrite newissues. This article uses data of all the corporate offeringsof equity-linked and derivative securities in the SecuritiesData Company (SDC) to estimate the issuer’s demand ofunderwriting services provided by investment banks across differentvarieties of securities. It finds that the demand for the innovator’svariety is larger than the imitators’. This demand advantagedecreases with time and faster for securities that appear laterin a sequence of innovations. Imitation becomes less attractivelater in the sequence as information from earlier deals spills-overto all banks.     

Taxing multinationals in a world with portfolio flows and R&D: Is capital export neutrality obsolete?

This paper examines recent claims that capital export neutrality no longer serves as an effective principle for the taxation of income from foreign direct investment, due to the large and growing role played by portfolio capital in financing investment and to the recognition that R&D is an important determinant of international trade and investment. In our evaluation of these claims, we find capital export neutrality appears robust. Because both domestic and foreign activities may be financed with portfolio capital, and they both produce goods that compete in the world economy, there is no compelling reason to grant a lower tax to foreign income alone. Regarding the promotion of R&D or the entry of new competitors, cutting the tax on foreign income may be no more effective than cutting the tax on domestic income. A second focus of the paper is to calculate what the residual U.S. tax rate on active foreign income actually is. Based on 1990 data this rate is negative if foreign income is defined appropriately.     

International investment in financial services

This paper analyzes and models the significant components of international trade in financial services, namely, foreign direct investment in banking for the US, the UK and Germany. It distinguishes between banks' activities abroad and FDI in banking by banks and non-banks. A model for FDI in banking is proposed which contains certain explanatory variables peculiar to FDI in banking as compared to FDI in manufacturing. The components of the model of FDI in banking is different from those models designed to explain banks activities abroad. The empirical results of this study of FDI in banking indicate that bilateral trade, banks' foreign assets, the cost of capital, relative economic growth, exchange rates and FDI in non-finance industries are the major determinants of foreign investment in banking.     

绿色金融推动自贸区可持续发展探讨

在当前世界经济政治大环境变幻莫测的背景下,我国自贸区已形成"1+3+7+1+6"的基本格局。为应对新冠疫情冲击,需稳定外资,优化外商投资环境和产业链布局,这为自贸区发展带来挑战与机遇。同时,我国绿色金融市场也得到不断完善,绿色金融无疑可以为自贸区的绿色可持续发展注入新的动力。本文系统梳理了我国的自贸区与绿色金融的发展现状,同时从自贸区发展绿色金融的必要性与可行性出发,深入探讨绿色金融结合绿色财政助力自贸区发展的路径与政策建议,以期推动"十四五"期间绿色开放发展理念进一步落地实施。     

基于面板数据的中部六省外商直接投资外溢效应分析

自改革开放以来引进外资一直是我国经济发展的重点,外资对经济发展及技术进步带来的外溢效应促进了我国经济的长足发展。主要结合中部六省外商直接投资在中部六省的发展情况,选择人力资本存量、对外贸易依存度两个指标来分析外商直接投资对中部六省经济发展带来的影响,得出人力资本存量对外商直接投资外溢效应的贡献度比较高,而对外贸易依存度对外商直接投资外溢效应影响并不显著。最后针对此分析结果为中部六省如何提高外商直接投资对经济发展的贡献提出相应的政策建议。     

Foreign shareholders,relative foreign policy uncertainty and corporate cash holdings

Studies have shown that foreign investors hedge risks stemming from economic and political uncertainty in the home country through outward investment. This paper studies how foreign investors' home country risk affects their overseas investment and the host country firms' corporate cash holdings. We find that relative foreign EPU, defined as the difference between foreign investors' home country EPU and the host country of investment EPU, negatively impacts the host country firms' cash holdings through their influences on managerial decision-making. This negative relationship arises from firms' precautionary and transaction motives as foreign investors perceive lower corporate risk and better investment opportunities in the host country firms. Good corporate governance is also instrumental in yielding this negative relationship. The reduction in cash holdings due to high relative foreign EPU is more pronounced if foreign investors' home country legal environment is weaker, the two countries are further apart, and there is little trade partnership between them.     

国际技术溢出、自主创新与服务业发展——基于长三角面板VAR模型的研究

利用长三角1997～2009年的相关数据,运用面板VAR模型研究国际技术溢出、自主创新对服务业发展的影响。研究结果表明,从长期来看,长三角国际贸易技术溢出抑制服务业发展,而外商直接投资技术溢出、自主创新投入的增加和自主创新能力的提高促进服务业发展。从短期来看,长三角国际贸易技术溢出和自主创新能力的提高会抑制服务业发展,而外商直接投资技术溢出和自主创新投入的增加促进服务业发展。方差分解结果表明,长三角自主创新对服务业发展的影响程度大于国际技术溢出对服务业发展的影响程度。     

Trade, Foreign Direct Investment, and International Technology Transfer: A Survey

What role does trade play in international technology transfer?Do technologies introduced by multinational firms diffuse tolocal firms? What kinds of policies have proved successful inencouraging technology absorption from abroad and why? Usingthese questions as motivation, this article surveys the recenttrade literature on international technology transfer, payingparticular attention to the role of foreign direct investment.The literature argues that trade necessarily encourages growthonly if knowledge spillovers are international in scope. Empiricalevidence on the scope of knowledge spillovers (national versusinternational) is ambiguous. Several recent empirical plant-levelstudies have questioned earlier studies that argued that foreigndirect investment has a positive impact on the productivityof local firms. Yet at the aggregate level, evidence supportsthe view that foreign direct investment has a positive effecton economic growth in the host country.      

中国进出口贸易与固定资产投资拉动经济比较研究——基于协整关系的实证检验

以1978～2011年以来的经济数据进行了协整关系检验,结果发现,我国进出口贸易、固定资产投资和GDP之间存在长期和短期的关系。通过22年的贡献率计算,发现固定资产投资对经济增长有稳定的拉动作用,但是对外贸易对经济增长的贡献率波动幅度较大。