TY - BOOK ID - 134793552 TI - Deep Trade Agreement and Foreign Direct Investments AU - Laget, Edith. AU - Roch, Nadia. AU - Varela, Gonzalo. PY - 2021 PB - Washington, D.C. : The World Bank, DB - UniCat KW - Deep Integration KW - Foreign Direct Investment KW - Globalization and Financial Integration KW - International Economics and Trade KW - International Trade and Trade Rules KW - Preferential Trade Agreements KW - Regional Trade Agreement KW - Regional Trade Integration KW - Regionalism KW - Trade Agreements KW - Trade and Regional Integration KW - Trade Finance and Investment UR - https://www.unicat.be/uniCat?func=search&query=sysid:134793552 AB - Preferential trade agreements are growing in number and deepening in content by incorporating disciplines that go beyond market access. They increasingly encompass non-trade-related disciplines as diverse as intellectual property rights, environment laws, or labor market regulations. Moreover, because investment is complementary to trade, preferential trade agreements provide relevant institutional frameworks to partner countries that wish to regulate their foreign investments. This paper studies the impact of deep trade agreements on foreign direct investment and examines three sub-questions. First, is the impact of trade agreements on foreign direct investment heterogeneous across types of business activity Second, is this impact heterogeneous across disciplines covered in the agreements Third, does the level of development of home and host countries matter for this impact The analysis exploits the World Bank's data set on the content of preferential trade agreement and data on announcements of bilateral greenfield investment at the activity level. The findings show that deep trade agreements matter for investment: every additional discipline in a preferential trade agreement increases foreign direct investment by 1.4 percent, on average. Deep agreements do not impact foreign direct investment in natural resources and extractive activities and have heterogeneous effects across manufacturing- and services-related activities. The results also reveal that disciplines that go beyond the mandate the World Trade Organization matter more for foreign direct investment. Disciplines related to investment liberalization and protection, intellectual property rights, or migration increase foreign direct investment, whereas disciplines on labor market regulations reduce investment. The results are mostly driven by investment between developed and developing countries. ER -