Do FDI and TPP without the United States Promote Stability in TPP Countries?
Yutaka Kurihara

This paper analyzes the relationship between foreign direct investment (FDI) and cross-country business cycles in Trans-Pacific Partnership (TPP) member countries. The U.S. President Trump decided to withdraw from TPP, and it is unclear whether or not this decision is beneficial for the U.S. economy. However, this paper focuses on FDI and examines whether the TPP without the United States would be beneficial for the member countries. Concretely, 11 or 12 member countries’ business cycles are taken into consideration for empirical analysis. Empirical studies show that FDI is an important channel through which economies may affect each other in a significant fashion, especially for the 12 economies of the TPP member countries. FDI will be an important key element in the success of the freer market. If the United States withdraws from the TPP, there would be a serious loss for the remaining 11 countries. There would also be a loss for the U.S. economy.

Full Text: PDF     DOI: 10.15640/jeds.v5n3a4