Local Content Requirements: Promises and Pitfalls

As anti-globalization and geopolitical tensions continue to rise, the use of local content requirements (LCRs) around the world has become more noticeable than ever before.

The reasons for adopting LCRs range from ensuring domestic supply availability, job creation, and increasing value added to safeguarding national security. Ing and Grossman examine country-specific as well as firm-product level exercises to explain how LCRs reduce fair competition, resulting in lower trade and productivit...