CGE analysis of trade and investment liberalisation in East Asia

Event: East Asian Association of Environmental and Resource Economics (EAAERE) 2014, 12-14 February 2014, Busan
Conference Paper

Trade and investment liberalisation is evolving rapidly in East Asia. Quantitative impact assessment studies tend to focus on trade liberalisation but the importance of additional analysis on the impacts of investment barriers has been pointed out by several trade liberalisation studies. We develop a global CGE model with endogenous investment allocation across countries/regions with sector specific capital stock for assessing economic and environmental impacts of both investment and trade liberalisation. Foreign direct investment (FDI) works not only as inter-regional investment allocation but also as dissemination of foreign production technologies (technology spillover). In this paper we assess economic and environmental impacts of trade and investment liberalisation among ASEAN+6 countries with and without assuming technology spillovers of FDI.