This book focuses on the relationship between FDI and financial service liberalization in the context of the WTO. By conducting an economic assessment on the extent of GATS liberalization in commercial banking it seeks to empirically clarify if the multilateral liberalization efforts under the WTO promote FDI.

This book focuses on the relationship between FDI and financial service liberalization in the context of the WTO. By conducting an economic assessment on the extent of GATS liberalization in commercial banking it seeks to empirically clarify if the multilateral liberalization efforts under the WTO promote FDI.

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."--Abstract.

The present study conducts an economic assessment of the impact financial services liberalization on foreign bank presence, in the context of the World Trade Organization (WTO). It focuses on how the General Agreement on Trade in Services (GATS) affects foreign direct investment (FDI) of commercial banks. For this purpose, an empirical model is developed to test how country-specific locational factors, as well as membership to the GATS and regional trade agreements (RTAs) affect commercial banking FDI. The model is run with FDI flow data for selected GATS signatories during 1990-2004, a period in which membership to several RTAs, as well as progress in GATS liberalization was observed. The findings show there is a strong positive relation between commercial banking FDI and a set of locational factors. Further evidence on the impact of membership to some RTAs in the country sample is found. However, no evidence on the positive impact of GATS liberalization on FDI is found. Considering the results, countries seeking to attract greater FDI will fare better if they improve their location factor conditions unilaterally. The value of the GATS for the present rests on its binding effect on the current level of liberalization. Future trade rounds may bring more promising results for financial services; given that the built-in progressive liberalization agenda of the GATS is an ongoing process.

The services sector plays an important role in ASEAN economies as it accounts for about half of the region’s GDP and more than 45 per cent of its total employment. ASEAN aspires to deepen integration in the services sector in order to enhance the sector’s contribution to economic development and growth in each country. Despite this, services liberalization has progressed slowly compared to goods liberalization both at the multilateral and the regional levels. Different regulatory mechanisms across countries have contributed to the slow pace of liberalization.

"Reviews the main findings and policy themes of FDI research, with a primary focus on the host country implications of FDI for emerging market economies." - abstract.

This paper investigates the role of structural reforms -financial reforms, trade liberalization, and privatization- as determinants of FDI inflows based on newly constructed dataset on structural reforms for 19 Latin American and 25 Eastern European countries between 1989 and 2004. Our main finding is a strong empirical relationship from reforms to FDI, in particular, from financial liberalization and privatization. These results are robust to different measures of reforms, split samples, and potential endogeneity and omitted variables biases.