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Who Uses Free Trade Agreements?

Author

Listed:
  • Kazunobu Hayakawa
  • Daisuke Hiratsuka
  • Kohei Shiino
  • Seiya Sukegawa

Abstract

It is noted that utilization of ASEAN Free Trade Agreements (FTAs) is low by international standards. In order to clarify the reasons for such low utilization, this paper investigates what kinds of Japanese affiliates in ASEAN are more likely to use FTAs in their exporting, by employing unique affiliate-level data. Our findings are as follows. First, the larger the affiliate is, or the more diversified the origins of its procurements, the more likely it is to utilize an FTA scheme in its exporting. Second, affiliates that export actively to countries with higher general tariffs are more likely to use FTAs. Third, there are clear differences in FTA utilization depending affiliates, locations and sectors.
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Suggested Citation

  • Kazunobu Hayakawa & Daisuke Hiratsuka & Kohei Shiino & Seiya Sukegawa, 2013. "Who Uses Free Trade Agreements?," Asian Economic Journal, East Asian Economic Association, vol. 27(3), pages 245-264, September.
    • Handle: RePEc:bla:asiaec:v:27:y:2013:i:3:p:245-264
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    References listed on IDEAS

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    1. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    2. Takahashi, Katsuhide & Urata, Shujiro, 2010. "On the Use of FTAs by Japanese Firms: Further Evidence," Business and Politics, Cambridge University Press, vol. 12(01), pages 1-15, April.
    3. William E. James, 2006. "Proposed Rules of Origin in Emerging Asia-Pacific Preferential Trade Agreements: Will PTAs Promote Trade and Development?," Working Papers 1906, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    4. Kyoji Fukao & Hyeog Ug Kwon, 2006. "Why Did Japan'S Tfp Growth Slow Down In The Lost Decade? An Empirical Analysis Based On Firm-Level Data Of Manufacturing Firms," The Japanese Economic Review, Japanese Economic Association, vol. 57(2), pages 195-228.
    5. Kati Suominen & Antoni Estevadeordal, 2004. "Rules of Origin in FTAs in Europe and in the Americas: Issues and Implications for the EU-Mercosur Inter-Regional Association Agreement," IDB Publications (Working Papers) 2568, Inter-American Development Bank.
    6. Kati Suominen & Antoni Estevadeordal, 2004. "Rules of Origin in FTAs in Europe and in the Americas: Issues and Implications for the EU-Mercosur Inter-Regional Association Agreement," IDB Publications (Working Papers) 9346, Inter-American Development Bank.
    7. Fukunari KIMURA, 2006. "International Production and Distribution Networks in East Asia: Eighteen Facts, Mechanics, and Policy Implications," Asian Economic Policy Review, Japan Center for Economic Research, vol. 1(2), pages 326-344.
    8. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
    9. Demidova, Svetlana & Krishna, Kala, 2008. "Firm heterogeneity and firm behavior with conditional policies," Economics Letters, Elsevier, vol. 98(2), pages 122-128, February.
    10. TAKAHASHI Katsuhide & URATA Shujiro, 2008. "On the Use of FTAs by Japanese Firms," Discussion papers 08002, Research Institute of Economy, Trade and Industry (RIETI).
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    Citations

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    Cited by:

    1. Hamanaka, Shintaro, 2013. "A note on detecting biases in assessing the use of FTAs," Journal of Asian Economics, Elsevier, vol. 29(C), pages 24-32.
    2. Mari PANGESTU & Lili Yan ING, 2015. "ASEAN: Regional Integration and Reforms," Working Papers DP-2015-69, Economic Research Institute for ASEAN and East Asia (ERIA).
    3. Hayakawa, Kazunobu & Yamashita, Nobuaki, 2011. "The role of Preferential Trade Agreements (PTAs) in facilitating global production networks," IDE Discussion Papers 280, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Naoto Jinji & Yoshihiro Mizoguchi, 2016. "Optimal Rules of Origin with Asymmetric Compliance Costs under International Duopoly," Journal of Industry, Competition and Trade, Springer, vol. 16(1), pages 1-24, March.
    5. Rafaelita M. Aldaba, 2015. "How are Firms Responding to Philippine Free Trade Agreements?," Working Papers id:7145, eSocialSciences.
    6. Kazuhiro Takauchi, 2014. "Rules of Origin and Strategic Choice of Compliance," Journal of Industry, Competition and Trade, Springer, vol. 14(2), pages 287-302, June.
    7. Hayakawa Kazunobu, 2015. "Impacts of FTA Utilization on Firm Performance," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 1325-1352, July.
    8. Chirathivat, Suthiphand & Srisangnam, Piti, 2013. "The 2030 Architecture of Association of Southeast Asian Nations Free Trade Agreements," ADBI Working Papers 419, Asian Development Bank Institute.
    9. Lili Yan Ing & Shujiro Urata & Yoshifumi Fukunaga, . "How Do Exports and Imports Affect the Use of Free Trade Agreements? Firm-level Survey Evidence from Southeast Asia," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).
    10. Hayakawa, Kazunobu & Yang, Chih-Hai, 2013. "How do free trade agreements change import prices? : firm-level evidence from China's imports from ASEAN," IDE Discussion Papers 436, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    11. Alfie Ulloa & Rodrigo Wagner, 2012. "Why don't All Exporters Benefit from Free Trade Agreements?: Estimating Utilization Costs," IDB Publications (Working Papers) 4635, Inter-American Development Bank.
    12. Rafaelita M. Aldaba & Erlinda M. Medalla & Josef T. Yap & Mureen Ane D. Rosellon & Fatima Lourdes E. del Prado & Melalyn C. Mantaring & Veredigna M. Ledda, . "Survey Report on the Use of Free Trade Agreements in the Philippines," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).

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