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GTAP Resources: Resource Display

GTAP Resource #1307

"The Impact of APEC Investment LIberalization and Facilitation"
by Kawasaki, Kenichi

The main objective of this study is to analyze the economic effects of investment liberalization and facilitation in a quantitative manner. The study employs a Computable General equilibrium (CGE) model of global trade to estimate those economy-wide impacts. At the same time, it is intended to present viable recommendations on effective investment liberalization policy.

It is found that all APEC member economies will benefit from investment liberalization. Those gains in real GDP range from 3.1 per cent in Indonesia and virtually zero in Japan. The benefit of investment liberalization is expected to be larger for economies with steeper investment barriers. However, this is also dependent on inward and outward FDI stock prior to investment liberalization. All in all, the impact on developing economies in the APEC region is expected to be relatively large.

Moreover, it is shown that the increases in FDI are in complementary relationship with trade. Trade volume of both imports and exports will expand as a result of investment liberalization. The real GDP of the APEC member economies as a whole would increase by 0.3 per cent mainly supported by capital formation, which expands by 0.5 per cent. While, the APEC trade would be boosted by 0.5 per cent.

One of the distinguished achievements in this study is quantification of investment barriers in the APEC member economies. This is the first attempt to quantify investment barriers based on description of investment-area activities in the Individual Action Plan (IAP) of the APEC member economies, which is vital in showing the state of progress made in APEC toward the goals announced at Bogor. The estimated barriers are utilized as key input to economic model simulations to assess the economy-wide impact of investment liberalization and facilitation.

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
Status: Published
By/In: Chapter III in The Benefits of Trade and Investment Liberalization and Facilitation in APEC, APEC Economic Committee, APEC Secretariat, Singapore
Date: 2002
Created: Kawasaki, K. (5/6/2003)
Updated: Dimaranan, B. (5/7/2003)
Visits: 1,207
No keywords have been specified.

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