GTAP Resources: Resource Display
| GTAP Resource #7331 |
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"Modelling FDI in GTAP: Supply Chains Reconfiguration" by Chen, Shenjie, Peter Dixon, Maureen Rimmer and Jingliang Xiao Abstract We start by reviewing three previous efforts at incorporating FDI in GTAP. (1) Lakatos and Fukui (2014). (2) Yuan and Tsigas (2022). (3) Dixon and Rimmer (2022) Contribution in this paper: In model (3), the presence of Japanese affiliates in the U.S. market makes the elasticity of substitution high for U.S. consumers between U.S. produced cars and imports from Japan. However, the model (3) specification does not recognize that the presence of a major Chinese affiliate in Vietnam should generate a high elasticity of substitution by U.S. consumers between imports from Vietnam and imports from China. Thus, model (3) does not introduce proper incentives for supply chain reconfigurations. For example, it doesn’t capture the idea that Chinese producers faced with U.S. tariffs can move their production from China to Vietnam. The present paper fixes this problem and provides illustrative applications. |
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- New quantitative trade models - Supply chains - Advances in quantitative methods - Dynamic modeling - Model extension/development |
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Public Access  Paper (230.1 KB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
