Turan Subasat

CORRUPTION AND FOREIGN DIRECT INVESTMENT: A PANEL GRAVITY MODEL APPROACH

This paper investigates the relationship between corruption and foreign direct investment (FDI) in the case of 15 transition countries by using a panel gravity model approach and suggests that corruption does not deter FDI.

GOVERNANCE AND FOREIGN DIRECT INVESTMENT IN LATIN AMERICA: A PANEL GRAVITY MODEL APPROACH

It is widely argued that good governance is an important determinant of foreign direct investment (FDI). With the exception of studies of corruption, however, empirical research on the link between governance and FDI is limited, particularly in the context of Latin America. Moreover, recent studies by Bellos and Subasat (2012a and 2012b) suggest that poor governance is a source of attraction rather than a hurdle for multinational companies in selected transition countries. By employing a panel data gravity model, this article aims to verify these unusual and interesting results in the context of selected Latin American countries. Our results confirm that the FDI enhancement role of poor governance exists not only in the transition countries but also in Latin America.

Governance and foreign direct investment: a panel gravity model approach

This paper investigates the link between governance and foreign direct investment in the case of 14 transition countries by using a panel gravity model approach in two alternative ways. First, the level of governance in the target country is studied. Second, the absolute difference in the governance level between the source and target country is investigated. In both cases the results suggest that the lack of good governance does not deter, in fact it encourages, foreign direct investment.

Do liberal trade policies promote trade openness

Although trade liberalization and trade openness are assumed to be strongly associated with each other and often used interchangeably, the empirical evidence has not been forthcoming. This article is an attempt to fill this gap. By investigating the link between trade openness and trade restrictions, it argues that while a negative link between various types of trade restrictions and trade openness is evident, the relationship is weak, statistically not always significant and there is no clear evidence that the removal of trade restrictions (trade‐liberalization) invariably leads to improved trade openness.

Can Differences in International Prices Measure Unequal Exchange in International Trade

This article discusses the limitations of using the deviations in international prices as a measure of unequal exchange. It argues that international prices are formed in a complex manner and lower international prices for low income countries cannot simply be considered as evidence for unequal exchange. The empirical validity of the measure is also questionable.

Does Simultaneous Implementation of Import-Substitution and Export-Promotion Neutralize Each Other?

After clarifying the widespread terminological confusion regarding ‘import-substitution’, ‘export-promotion’ and ‘free trade’, this article focuses on an interesting debate about their complementarities. Particular attention will be paid to whether the simultaneous implementation of import-substitution and export-promotion neutralises each other and leads to free trade results. It will be argued that although this debate is stimulating, it has a number of important limitations and has very little bearing to actual trade policy implementation.