This paper analyzes a model of two-way movement of physical capital, and examines the e¤ects of direct investment liberalization on resource allocation, income distribution, and commodity trade. If either country or both countries liberalizes investment under exogenously given commodity prices, some factor owners in a country will gain but some others will lose. If capital movement a¤ects commo...

Trade Liberalization in a Globalizing World Globalization is not only about the rise of trade, FDI, and migration. It is also about the changing linkages among these flows. The main findings of the paper can be summarized as follows. First, at least in the nineties, import trade liberalization fostered not only trade but also inward investment, confirming that trade and FDI toward developing co...

We study the role of financial development on aggregate implications reducing import tariffs capital and intermediate inputs. document empirically that financially underdeveloped economies feature a slower response following trade liberalization. To quantify these effects, we set up general equilibrium model with heterogeneous firms subject to collateral constraints estimate it using Colombian ...

The first part of this paper examines the theoretical and empirical case for full capital account liberalisation in developing countries(DCs) and finds it unconvincing. Indeed, analysis and evidence presented here point to a compelling case against it. The second part considers the liberalisation of only the long-term capital account, particularly FDI a form of in-flow favoured by most economis...

The issue of the interaction between trade and labor mobility has become a major topic in the context of economic integration and trade liberalization. The main purpose of this study is to investigate the issue of international labor mobility from the standpoint of new developments in trade theory, by asking the following question: does trade liberalization result in the substitution or complem...