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    Asymmetric Effects of Trade and FDI: The Role of Country Size and Bridge Multinational Production

    Abstract
    Total gains from openness come through three channels: (i) trade, (ii) domestic multinational production (DMP), and (iii) bridge multinational production (BMP). We develop a quantitative theory to measure the effects of trade barriers and country size on the gains from openness through each of these channels. We show that these are sensitive to country size and larger in Europe than in South America. Country size is a crucial determinant of the contribution of each of these channels to the total gains from openness. DMP is more important in large countries, whereas the BMP channel is more important in small countries.
    Subject
    Comercio internacional | Finanzas
     
    Country / Region
    América Latina y el Caribe
    URI
    https://scioteca.caf.com/handle/123456789/1986
    Date
    2022-12-13
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    • 6.1 Documentos de trabajo en investigación socioeconómica
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    Asymmetric Effects of Trade and FDI_The Role of Country Size and Bridge Multinational Production.pdf (452.0Kb)
    Author
    Allub, Lian
    Aragon, Nicolas
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