Quotation Ghodsi, Mahdi. 2020. How do technical barriers to trade affect foreign direct investment? Tariff jumping versus regulation haven hypotheses. Structural Change and Economic Dynamics. 52 269-278.


RIS


BibTeX

Abstract

Trade liberalisation and the EU enlargement over the past two decades has allowed European multinational enterprises (MNEs) to benefit from production fragmentation in Central, East and Southeast Europe (CESEE). Technical Barriers to Trade (TBTs) might induce costs of certification, inspection and compliance at the border that encourage MNEs to undertake foreign direct investment (FDI) in the host market instead of exporting to that market. However, overregulation and stringency of standards that are embedded within these TBTs might discourage FDI in a given market. The former shows the intuition behind ‘tariff jumping’ motives, while the latter is based on the ‘regulation haven hypothesis’. These two opposing hypotheses are tested in this article by analysing the impact of TBTs imposed by both home and host countries on inward FDI stocks in the CESEE host countries during the period 1996–2016. The results hint at ‘tariff jumping’ motives of FDI in these countries. This is more evident for discriminative TBTs imposed by the host economy on which the home country raised Specific Trade Concerns (STC) at the World Trade Organization (WTO).

Tags

Press 'enter' for creating the tag

Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Structural Change and Economic Dynamics
Citation Index SSCI
WU-Journal-Rating new VW-D
Language English
Title How do technical barriers to trade affect foreign direct investment? Tariff jumping versus regulation haven hypotheses
Volume 52
Year 2020
Page from 269
Page to 278
Reviewed? Y
URL https://api.elsevier.com/content/article/PII:S0954349X19302085?httpAccept=text/xml
DOI http://dx.doi.org/10.1016/j.strueco.2019.11.008
Open Access N

Associations

People
Ghodsi, Mahdi (Details)
Organization
Department of Economics (Kubin) (Details)
Google Scholar: Search