TY  - JOUR
AU  - Markusen,James R.
TI  - Trade versus Investment Liberalization
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6231
PY  - 1997
Y2  - October 1997
UR  - http://www.nber.org/papers/w6231
L1  - http://www.nber.org/papers/w6231.pdf
N1  - Author contact info:
James R. Markusen
Department of Economics
University of Colorado
Boulder, CO 80309-0256
Tel: 303/492-0748
Fax: 303/492-8960
E-Mail: james.markusen@colorado.edu
AB  - Despite several theoretical contributions and considerable informal empirical evidence" to the contrary, a notion that trade and investment are substitutes persists in trade policy" analysis.  This paper considers the liberalization of commodity trade versus liberalization" allowing direct investment versus the two together.  For a relatively skilled-labor-scarce" economy, I show that trade and investment liberalization are quite different together are in a sense complements.  The intuition may be that direct investment provides such" a country with crucial inputs (knowledge-intensive producer services) without which the" country cannot effectively exploit its abundant factors in certain industries."
ER  -