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Abstract
In order to address the significant increase in importance of FDI and of MNCrelated policies, we develop an extended GTAP model and associated global database that accounts for both foreign direct investment and multinational companies differentiated by the region of ownership. The model is calibrated on the GTAP v8 database complemented with global foreign affiliate statistics data described in detail in Fukui and Lakatos (2012) and the FDI stocks data Boumellassa et al. (2007). To illustrate the model’s behaviour, we examine the recent policy debate with respect to allowing foreign direct investment in multibrand retailing in India.