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Heterogeneous Impacts of Free Trade Agreements: The Case of Japan

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  • Kenta Yamanouchi

    (Keio University Mita 2-15-45 Minato-ku, Tokyo 108-8345, Japan)

Abstract

This paper investigates the trade creation effects of Japan's free trade agreements (FTAs) using aggregate trade data for the years 1996–2015. We estimate various specifications of a gravity model. Our main finding is that the effects of Japan's FTAs are not clearly observed when the gravity model is specified with three types of fixed effects (i.e., exporter-year fixed effects, importer-year fixed effects, and country-pair fixed effects). In fact, the effects of FTAs vary substantially among trade partners and around half of the FTAs increase Japan's trade values. Our results also suggest that FTAs with small trade partners tend to have large effects on Japan as well as other countries. Recently enforced FTAs, however, increase Japan's import values more rapidly.

Suggested Citation

  • Kenta Yamanouchi, 2019. "Heterogeneous Impacts of Free Trade Agreements: The Case of Japan," Asian Economic Papers, MIT Press, vol. 18(2), pages 1-20, Summer.
    • Handle: RePEc:tpr:asiaec:v:18:y:2019:i:2:p:1-20
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/asep_a_00686
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    References listed on IDEAS

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    2. Chae-Deug Yi, 2022. "The impact of the Japan-European Union Economic Partnership Agreement on the trade and income of Japan, the European Union, and South Korea," Asia Europe Journal, Springer, vol. 20(3), pages 329-356, September.

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