No abstract

This paper provides new measures of restrictions on inward foreign direct investment (FDI) for OECD countries. Several different types of restrictions are considered: limitations on foreign ownership, screening or notification procedures, and management and operational restrictions. These restrictions are computed for nine sectors and eleven sub-sectors, most of which are in services, and then aggregated into a single measure for the economy as a whole. According to the aggregate indicators, the last two decades, and especially the 1990s, have witnessed dramatic liberalisation in FDI restrictions. OECD countries are now generally open to inward FDI, although there remain substantial differences between countries and across industries. The most open countries are now in Europe, at least as far as statutory restrictions are concerned. The preponderance of remaining restrictions is in services, with almost no overt restrictions in manufacturing...

This paper provides an empirical analysis of the effect of infrastructure provision on industry-level productivity and international specialization, as suggested by Clarida and Findlay's (1992 ) model. We calculate total factor productivity (TFP) for 18 developed and developing countries and 10 manufacturing industries, and study the effects of supplies of roads, telecommunications and electric power on international variations in sectoral TFP, i.e. comparative advantage. We also examine the effects of infrastructure on the sectoral composition of output across countries. Using a three-stage least-squares estimation strategy to control for endogeneity of infrastructure provision, we find that infrastructure, especially roads, helps to explain patterns of comparative advantage and international specialization. Copyright � 2007 The Authors; Journal compilation � 2007 Blackwell Publishing Ltd.

According to the classical Ricardian theory of comparative advantage, relative labor productivities determine trade patterns. The Ricardian model plays an important pedagogical role in international economics, but has received scant empirical attention since the 1960s. This paper assesses the contemporary relevance of the Ricardian model for US trade. Cross-section seemingly unrelated regressions of sectoral trade flows on relative labor productivity and unit labor costs are run for a number of countries vis-à-vis the United States. The coefficients are almost always correctly signed and statistically significant, although much of the sectoral variation of trade remains unexplained.

This paper quantifies and analyses the extent of restrictions on inward foreign direct investment (FDI) in the service sector in developed and developing countries. Services account for an increasing share of global FDI. Recognition of the economic benefits of FDI clashes with nationalistic economic, political and national security concerns about foreign takeover of 'strategic' sectors, such as telecommunications, finance and transport. Consequently, almost all countries impose restrictions on FDI in services. Several different types of restrictions are considered: limitations on foreign ownership, screening or notification procedures, management restrictions and operational restrictions. These restrictions on FDI are computed at the industry level and then aggregated into a single measure for the service sector as a whole for 23 developed and 50 developing countries. Notwithstanding the worldwide trend towards liberalisation of restrictions, there remain substantial disparities between regions and individual countries in the severity of restrictions on inward FDI in services. The lowest restriction scores are in Europe and Latin America, whereas East Asia, South Asia and the Middle East have the highest levels of restrictions. The evolution over time of FDI restrictions is also presented for developed countries over the period 1981-2005, showing liberalisation in all countries, especially since the early 1990s, although to varying extents across countries. The severity of restrictions also differs considerably by sector, with electricity, telecommunications, transport and finance most restricted. The paper also finds a strong negative correlation of restrictiveness with inward stocks of FDI in services, suggesting that restrictions impede FDI. Copyright 2009 The Author. Journal compilation 2009 Blackwell Publishing Ltd.