We assess the role of capital goods imports and inflows of foreign direct investment (FDI) as transmission channels … depends on the BRICs’ local capacity to absorb superior technologies and on domestic investment. …

In this paper, we show that a reduction in capital goods prices induced by trade policies can stimulate both investment … differential exposure to reductions in capital goods tariffs react in terms of their investment and labor decision. Firms that see … a larger decline in the input tariff for capital goods increase investment and labor for production, as well as their …

reduction in intermediate and consumption input or output tariffs do not significantly increase their investment rates. However …, firms' investment rate increase strongly in response to a reduction in capital goods input tariffs. Firms do not substitute … do not increase investment and employment. Our results suggest that a reduction in the relative price of capital goods …