The Impact of Liberalizing Barriers to Foreign Direct Investment in Services: The Case of Russian Accession to the World Trade Organization

58 Pages Posted: 20 Apr 2016

See all articles by Jesper Jensen

Jesper Jensen

TECA Training ApS

Thomas F. Rutherford

Centre for Energy Policy and Economics

David G. Tarr

International Trade Analysis

Multiple version iconThere are 2 versions of this paper

Date Written: August 2004

Abstract

Jensen, Rutherford, and Tarr 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.

This paper - a product of the Trade Team, Development Research Group - is part of a larger effort in the group to assess the impact of liberalization of barriers against foreign direct investment in services sectors.

Suggested Citation

Jensen, Jesper and Rutherford, Thomas F. and Tarr, David G., The Impact of Liberalizing Barriers to Foreign Direct Investment in Services: The Case of Russian Accession to the World Trade Organization (August 2004). World Bank Policy Research Working Paper No. 3391. Available at SSRN: https://ssrn.com/abstract=625268

Jesper Jensen

TECA Training ApS ( email )

Mosevej 55
Hørsholm, 2970
Denmark
+45 24 20 50 00 (Phone)

HOME PAGE: http://www.tecatraining.dk

Thomas F. Rutherford

Centre for Energy Policy and Economics ( email )

ETH-Zentrum
Zurich, CH-8092
United States
+41 (0)44/632 6359 (Phone)
+41 (0)44/632 1622 (Fax)

HOME PAGE: http://www.cepe.ethz.ch/

David G. Tarr (Contact Author)

International Trade Analysis ( email )

7901 Hispanola Avenue
Apt. 1102
North Bay Village, FL 33141
United States
5712242796 (Phone)

HOME PAGE: http://https://sites.google.com/site/davidgtarr/

Register to save articles to
your library

Register

Paper statistics

Downloads
329
Abstract Views
2,032
rank
85,675
PlumX Metrics