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International Trade & FDI: A Focus on FTAA. Mary A. Marchant (U. of KY) Tigran A. Manukyan (U. of KY) Won Koo (No. Dakota State U.). Overview. Recent Trends in Trade & FDI Research Objectives Theoretical Model Empirical Results . Recent Trends in Trade & FDI.

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international trade fdi a focus on ftaa

International Trade & FDI: A Focus on FTAA

Mary A. Marchant (U. of KY)

Tigran A. Manukyan (U. of KY)

Won Koo (No. Dakota State U.)

overview
Overview
  • Recent Trends in Trade & FDI
  • Research Objectives
  • Theoretical Model
  • Empirical Results
recent trends in trade fdi
Recent Trends in Trade & FDI
  • Evolving importance of the export market for
    • U.S. agriculture
    • FTAA
slide4
Exports fell sharply during the financial

crisis of the 1980s, recovering late in the

decade as interest rates fell. They fell again

late in the 1990s as the “Asian Flu” gripped

many client nations.

recent trends in trade fdi5
Recent Trends in Trade & FDI
  • Changing composition of U.S. agricultural export products
  • From bulk to processed foods
slide6
Bulk commodity exports dominated agricultural exports

until recent years when value added sales began to increase.

u s agricultural exports to ftaa and to canada mexico and brazil consumer oriented products
--- U.S. Agricultural Exports to FTAA and to Canada, Mexico and Brazil ( CONSUMER-ORIENTED PRODUCTS )
u s ag imports from ftaa and from canada mexico and brazil value consumer oriented products
U.S. Ag. Imports from FTAA and from Canada, Mexico, and Brazil (Value)----- Consumer-Oriented Products
u s ag trade with ftaa and with canada mexico and brazil value consumer oriented products
U.S. Ag. Trade with FTAA and with Canada, Mexico, and Brazil (Value)--- Consumer-Oriented Products
recent trends in trade fdi14
Recent Trends in Trade & FDI
  • Changes in foreign market assess—exports vs. FDI
recent trends in trade fdi16
Recent Trends in Trade & FDI
  • Evolving importance of the export market for U.S. agriculture
  • Processed foods
  • FDI
research objectives
Research Objectives

To identify

  • Export & FDI determinants for FTAA countries
  • Relationship between exports & FDI– substitutes or complements?
slide18
Data

Processed foods, SIC-20

  • 3 FTAA countries—Canada, Mexico, and Brazil
  • Annual Data
  • Sources—Commerce, ERS, IMF, BEA,
ftaa empirical results
FTAA Empirical Results

FDI was influenced by

  • Exchange rates (+)
  • GDP (+)
  • Exports (+)
  • Interest rates
  • Compensation
ftaa empirical results20
FTAA Empirical Results

Exports were influenced by

  • Export prices (-)
  • Exchange rates (-)
  • GDP
  • FDI (+)
ftaa conclusions
FTAA Conclusions
  • Importance of exports, processed foods, & FDI for the U.S. & FTAA
  • Empirical Results support a complementary relationship between exports & FDI in FTAA—Canada, Mexico & Brazil
  • Consistent with results of Malanoski, Handy & Henderson; Somwaru & Bolling
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