Export-led Growth via Export Platform Strategies: The impact of free trade agreements on the structure of FDI

Akinori Tomohara & Kazuhiko Yokota

Published: December 2009

Free trade agreements (FTAs) have the potential to impact FDI structures. Specifically, we explore when and how export platform strategies can result in export-led growth. A reduction in trade costs, including tariffs and non-tariff barriers, are likely to lead to export platform FDI. Cost advantages in a host country, as well as quality labour and scale economies, are also effective in attracting export platform FDI. We conclude that medium–high technology industries in low-income countries are likely to benefit from export platform FDI. A few indices are suggested to evaluate the conditions under which countries and industries can benefit from export platform FDI.

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