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Trade, FDI, and Global Value Chains
September 26, 2016Theme: Competitiveness and Productivity

Recent events such as the vote for Brexit point to a potential backlash against the globalized economy, with consequences for current trade regimes and flows of foreign investment. In a world where value chains crisscross the globe, the adverse impacts for developed and developing economies could be significant.

In this talk, Hiau Looi Kee will present a case study of how costly a rupture in the existing trade regime could be. She will draw on the Overall Trade Restrictiveness Index (OTRI)—a tool pioneered during the financial crisis to better understand the drivers of trade flows—to examine the potential costs associated with a country’s withdrawal from a free trade union. In addition to considering tariff barriers, this case study will also incorporate the costs associated with non-tariff barriers.

Kee will also discuss examples of how trade and FDI policies may affect global product networks in the event that a country fails to retain or attract FDI. Past research has suggested that the presence of FDI leads to inter-industry linkages and may help improve the domestic content in exports. Over the long run, the failure to retain or attract FDI could significantly damage a country’s export competitiveness.

Last Updated: Sep 15, 2016

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    Hiau Looi Kee, Senior Economist, Research Department

    Hiau Looi Kee is a Senior Economist with the Trade Team of the World Bank Research Department. Her research focuses on trade, productivity and growth at the firm and aggregate level. Her current projects include studying the domestic value-added in exports, shared-supplier spillovers of FDI, rules of origin and firm productivity in Bangladesh's garment sector and large-scale estimations of import demand elasticities, ad valorem equivalent of non-tariff measures and trade restrictiveness indexes. Her work has been published in many general interests economics journals and the top field journals. She has a Ph.D. in economics from the University of California at Davis.
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    Asli Demirgüç-Kunt, Director of Research

    Asli Demirgüç-Kunt is the Director of Research in the World Bank. After joining the Bank in 1989 as a Young Economist, she has held different positions, including Director of Development Policy, Chief Economist of Financial and Private Sector Development Network, and Senior Research Manager, doing research and advising on financial sector and private sector development issues.
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    Shanta Devarajan, Chief Economist, Middle East and North Africa

    Shanta Devarajan is the Chief Economist of the World Bank’s Middle East and North Africa Region. Since joining the World Bank in 1991, he has been a Principal Economist and Research Manager for Public Economics in the Development Research Group, and the Chief Economist of the Human Development Network, the South Asia Region and Africa Region. He was the director of the World Development Report 2004, Making Services Work for Poor People. Before 1991, he was on the faculty of Harvard University’s John F. Kennedy School of Government.

The Policy Research Talks showcase the latest findings of the research department and their implications for World Bank operations. The goal of the monthly event is to facilitate a dialogue between researchers and operational staff, so that we can challenge and contribute to the World Bank's intellectual climate and re-examine conventional wisdom in current development theories and practices.  Read More »

Event Details
  • Time: 12:30 – 2:00 PM, September 26, 2016
  • Location: MC 2-800, World Bank Headquarters
  • CONTACT: Tourya Tourougui
  • ttourougui@worldbank.org
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