The Impact of Liberalizing Barriers to Foreign Direct Investment in Services: The Case of Russian Accession to the World Trade Organization
The authors use a computable general equilibrium model of the Russian economy to assess the impact of accession to the World Trade Organization (WTO), which encompasses improved market access, tariff reduction, and reduction of barriers against mul...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/09/5114977/impact-liberalizing-barriers-foreign-direct-investment-services-case-russian-accession-world-trade-organization http://hdl.handle.net/10986/14142 |
| Summary: | The authors use a computable general
equilibrium model of the Russian economy to assess the
impact of accession to the World Trade Organization (WTO),
which encompasses improved market access, tariff reduction,
and reduction of barriers against multinational service
providers. They assume that foreign direct investment in
business services is necessary for multinationals to compete
well with Russian business service providers, but
cross-border service provision is also present. The model
incorporates productivity effects in both goods and services
markets endogenously through a Dixit-Stiglitz framework. As
a result, the estimated gains from WTO accession are much
larger than would be obtained from a typical model with
perfect competition. The ad valorem equivalent of barriers
to foreign direct investment have been estimated based on
detailed questionnaires completed by specialized research
institutes in Russia. The authors estimate that Russia will
gain about 7.2 percent of the value of Russian consumption
in the medium run from WTO accession and up to 24 percent in
the long run. They estimate that the largest gains to Russia
will derive from liberalization of barriers against
multinational service providers. Piecemeal and systematic
sensitivity analysis shows that their results are robust. |
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