1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Policies and International Integration

Influences on Trade and Foreign Direct Investment

This paper assesses the importance of border and non-border policies for global economic integration. The focus is on four widely-advocated policies: removing explicit restrictions to trade and FDI; promoting domestic competition; improving the adaptability of labour markets; and ensuring adequate levels of infrastructure capital. The analysis covers FDI and trade in both goods and services, thus aiming to account for the most important channels of globalisation and dealing with most modes of cross-border services supply. It first describes trends in trade, FDI and the four sets of policies using a large set of structural policy indicators recently constructed by the OECD, including the new summary indicators for FDI-specific regulations described in Golub (2003). It then estimates the impact of policies on bilateral trade and bilateral and multilateral FDI. The results highlight that, despite extensive liberalisation over the past two decades, there is scope for further reducing ...

English

Keywords: panel data, regulation, foreign direct investment, international trade, liberalisation, services
JEL: F16: International Economics / Trade / Trade and Labor Market Interactions; F13: International Economics / Trade / Trade Policy; International Trade Organizations; F21: International Economics / International Factor Movements and International Business / International Investment; Long-term Capital Movements; C23: Mathematical and Quantitative Methods / Single Equation Models; Single Variables / Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models; L50: Industrial Organization / Regulation and Industrial Policy / Regulation and Industrial Policy: General; F15: International Economics / Trade / Economic Integration
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