This paper was developed to outline the issues and to help clarify the different perspectives on competition policy, liberalization, privatization and regulations. The paper primarily deals with competition policy, liberalization and privatization in the telecoms sector given that this is the most relevant area of these policies or models to...
This paper develops an oligopolistic model of international trade with heterogeneous firms to examine how trade liberalization affects R&D (Research & Development) investment, industry productivity and social welfare. Three effects of trade liberalization on industry productivity are identified: A direct effect through changes in R&D; A scale effect due to...
Numerous studies have investigated the link between trade policy and firm productivity. Despite justifying firm level analysis on the basis of considerable heterogeneity between firms within narrowly defined industries, these studies typically constrain all firms to have the same expected response to changes in trade policy. This paper develops a...
This paper develops a general equilibrium model of multi-product firms and analyzes their behavior during trade liberalization. Firm productivity in a given product is modeled as a combination of firm-level "Ability" and firm-product-level "Expertise", both of which are stochastic and unknown prior to the firm's payment of a sunk cost...
In an international oligopoly model, this paper investigates interaction between trade liberalization in goods and liberalization in service FDI Foreign Direct Investment. Since some services are market-specific and have non-tradable nature, a foreign firm has a higher cost in service provisions compared to its domestic competitor and it can overcome...
This paper on the benefits and costs of financial globalization for developing countries has exploded in last few years, but along many disparate channels with a variety of apparently conflicting results. There is still little robust evidence of the growth benefits of broad capital account liberalization, but a number of...
This paper presents a trade model with firm-level productivity differences and R&D-driven growth. Trade liberalization causes the least productive firms to exit but also slows the development of new products. The overall effect on productivity growth depends on the size of intertemporal knowledge spillovers in R&D (Research & Development). When...
While there is considerable empirical evidence on the impact of liberalizing trade in goods, the effects of services liberalization have not been empirically established. This paper examines the link between services sector reforms and the productivity of manufacturing industries relying on services inputs. The results, based on firm-level data from...
This paper analyzes Mergers and Acquisitions (M&A) as a previously neglected channel of industrial restructuring in the face of trade liberalization. Using the Canada-United States Free Trade Agreement of 1989 as a natural experiment, the author shows that trade liberalization leads to a significant increase in M&A activity. He also...
Free trade agreements also helped to enhance the competitive position of many U. S. companies by making it easier to take advantage of scale economies and extend regional supply chains. Most supporters of NAFTA favored liberalization in the GATT, while opponents of free trade with Mexico fought the Uruguay round...
The causes of global economic liberalization are commonly located in technological change, hegemonic leadership, or a combination of the two. This paper argues that the technological imperative for global liberalization, and the commercial power and thus the hegemony of the United States, both now rely on the prevention of free...
This paper discusses the experience of the European Union's EU eight new member countries (EU8) between 1995 and 2003 when the bulk of capital account liberalization took place, focusing on interest-rate-sensitive portfolio flows and financial flows. It takes stock of the lessons from capital flow patterns to draw policy conclusions....
This paper on trade and Foreign Direct Investment FDI indicates that they could be either substitutes or complements. The empirical evidence on U.S.-Japan and APEC countries suggests that trade and FDI exhibit a complementary relationship. To examine interactions between FDI and trade adjustments, APEC trade and investment liberalization scenarios are...
Because of concern that OECD tariff reductions will translate into worsening export performance for the least developed countries, trade preferences have proven a stumbling block to developing country support for multilateral liberalization. The paper examines the actual scope for preference erosion, including an econometric assessment of the actual utilization and...
The report demonstrates how capital account and trade account liberalizations help reduce inefficiencies associated with the fluctuations in the output gap, relative to the inefficiencies associated with the fluctuations in inflation. With capital account liberalization the representative household is able to smooth fluctuations in consumption, and thus becomes relatively insensitive...
This paper focuses on the roles of minimum capital requirements and prudential supervision in promoting financial stability during financial liberalization. The paper extends the Hellmann, Murdock, and Stiglitz model to analyze the effects of prudential supervision and demonstrates the trade-off between the quality of supervision and the level of minimum...
With the public finances of many developing and emerging market countries still heavily dependent on trade tax revenues, further trade liberalization may be hindered unless they are able to develop alternative sources of revenue. This paper uses panel data for 111 countries over 25 years - cleaned for a variety...
Plant turnover increases aggregate productivity when efficient producers are more likely to survive. Given high entry and exit rates and the potential importance of net entry in accounting for aggregate productivity, in this paper we examine the determinants of plant exits and then examine how exits and other forms of...
This paper develops a monopolistically competitive model of trade with firm heterogeneity - in terms of productivity differences - and endogenous differences in the 'toughness' of competition across markets - in terms of the number and average productivity of competing firms. It analyzes how these features vary across markets of...
Few issues are more controversial in the contemporary globalization debate than the effects of trade liberalization on poverty and well-being in low-income countries. The question of how changes in trade policy affect child labor and schooling is particularly contentious. In this paper the relationship between changes in trade policy and...
