North-South customs unions and international capital mobility

• 成果类型: Article
• 署名作者: Fernandez-Arias, E; Spiegel, MM
• 署名单位: Federal Reserve System - USA; Inter-American Development Bank
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(97)00051-2
• 发表日期: 1998
• 页码: 229-251
• 关键词: customs union; Sovereign risk; Financial integration

摘要

We examine the implications of a North-South trade accord where investments in the Southern partner nation exhibit country risk. Our analysis demonstrates that North-South trade accords can serve as credibility-enhancing mechanisms that induce additional foreign capital inflows into Southern partner nations. We also demonstrate that the presence of sovereign risk changes the trade-offs between trade creation and diversion, enhancing the potential for regional trade accords to increase the welfare of accord members. However, sovereign risk also introduces a novel channel through which non-partner Southern nations can have their welfare reduced by regional trade accords. (C) 1998 Elsevier Science B.V. All rights reserved.