| Trade Liberalization, International Relocation of Firms, and Economic Growth |
Wataru Johdo, |
| Tokyo Keizai University, Tokyo, Japan |
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Corresponding Author:
Wataru Johdo ,Email: johdo@tku.ac.jp |
| Copyright ©2024 The Journal of Economic Integration |
| ABSTRACT |
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This paper presents a framework for understanding the role of global tariff rate reductions in affecting the world growth rate, given knowledge spillovers in research and development (R&D) and the relocation of firms. In particular, we highlight one aspect of the model: the international relocation of firms associated with a reduction in world tariff rates. This paper shows that, given the spillover effect of localized R&D knowledge, a simultaneous multilateral reduction in the common tariff rate increases the world growth rate through the relocation of firms.
JEL Classification
E20: General
F13: Trade Policy; International Trade Organizations
F16: Trade and Labor Market Interactions
F21: International Investment; Long Term Capital Movements
F43: Economic Growth of Open Economies |
| Keywords:
tariffs | knowledge spillovers | R&D | international relocation of firms | endogenous growth
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