WTO Working Papers

WTO working papers usually represent research in progress. Such research may be conducted in the preparation of WTO Secretariat reports, studies or other material for WTO members. The papers are circulated for comment because the WTO considers critical review of professional research to be extremely important.


Does Globalization Cause a Higher Concentration of International Trade and Investment Flows?

It has sometimes been argued that "globalization" benefits only a small number of countries, and that this leads to greater marginalization of excluded countries. This paper argues that globalization is not necessarily biased towards greater concentration in international trade and investment flows. Marginalization is more likely to be explained by domestic policies in relatively closed countries. The paper shows that among relatively open economies, the concentration of international trade and investment flows has declined over the last two decades, whereas the opposite is true among relatively closed economies. Thus, marginalization is not intrinsic to globalization. Key Words: Globalization, international trade and investment flows concentration.


Keywords: international trade and investment flows concentration, Globalization
JEL: F21: International Economics / International Factor Movements and International Business / International Investment; Long-Term Capital Movements; F13: International Economics / Trade / Trade Policy; International Trade Organizations; F11: International Economics / Trade / Neoclassical Models of Trade
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