The Effects of the Uruguay Round: Empirical Evidence from U.S. Industry

11 Pages Posted: 28 Aug 2013

See all articles by John Mutti

John Mutti

Grinnell College - Department of Economics

Rachelle C. Sampson

University of Maryland - Robert H. Smith School of Business; Georgetown University - Robert Emmett McDonough School of Business

B. Yeung

affiliation not provided to SSRN

Date Written: January 2000

Abstract

This article uses an event study to evaluate the anticipated results of the Uruguay Round on U.S. industry. Economists commonly use computable general equilibrium (CGE) models to predict the net economic efficiency effects of trade agreements. The event study method represents a complementary approach that relies on stock price movements to assess how investors predict that an event, in this case the conclusion of the Uruguay Round, will affect industry profitability. The empirical estimates indicate that U.S. industries with comparative advantage (disadvantage) experience positive (negative) stock price reactions, reflecting an increase (a decrease) in the industry trade and investment opportunities as well as an increased (decreased) return to existing tangible and intangible assets. For the market as a whole, the variation in stock prices does not differ significantly from zero, and the economic magnitude of industry gains and losses is small. These results are consistent with most CGE assessments and with the skeptical attitude that the real impact of the Uruguay Round Agreement remains uncertain.

Suggested Citation

Mutti, John and Sampson, Rachelle C. and Yeung, B., The Effects of the Uruguay Round: Empirical Evidence from U.S. Industry (January 2000). Contemporary Economic Policy, Vol. 18, Issue 1, pp. 59-69, 2000, Available at SSRN: https://ssrn.com/abstract=2317101 or http://dx.doi.org/10.1111/j.1465-7287.2000.tb00006.x

John Mutti (Contact Author)

Grinnell College - Department of Economics ( email )

P.O. Box 805
Grinnell, IA 50112
United States
515-269-3143 (Phone)
515-269-4985 (Fax)

Rachelle C. Sampson

University of Maryland - Robert H. Smith School of Business ( email )

Van Munching Hall
University of Maryland
College Park, MD 20742-1815
United States
(301) 405-7658 (Phone)

HOME PAGE: http://www.linkedin.com/in/rachelle-sampson-68a3b610/

Georgetown University - Robert Emmett McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States

B. Yeung

affiliation not provided to SSRN

No Address Available

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