Multinational production and investment provisions in preferential trade agreements

Sébastien Miroudot; Davide Rigo

doi:10.1093/jeg/lbab031

Multinational production and investment provisions in preferential trade agreements

Sébastien Miroudot
, Davide Rigo^*

^*Corresponding author for this work

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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.

Original language	English
Pages (from-to)	1275-1308
Number of pages	34
Journal	Journal of Economic Geography
Volume	22
Issue number	6
Early online date	11 Oct 2021
DOIs	https://doi.org/10.1093/jeg/lbab031
Publication status	Published - 1 Dec 2022

Bibliographical note

Keywords

Preferential trade agreements
multinational production
investment provisions
foreign affiliates
global value chains

ASJC Scopus subject areas

Geography, Planning and Development
Economics and Econometrics

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MiroudotS2021MultinationalFinal published version, 391 KBLicence: Creative Commons: Attribution (CC BY)

Cite this

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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.",

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Multinational production and investment provisions in preferential trade agreements

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

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