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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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    File URL: http://hdl.handle.net/10.1111/asej.12013
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    6. 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, December.
    7. 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.
    8. Demidova, Svetlana & Krishna, Kala, 2008. "Firm heterogeneity and firm behavior with conditional policies," Economics Letters, Elsevier, vol. 98(2), pages 122-128, February.
    9. 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..
    10. 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, June.
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    Cited by:

    1. Yap, Josef T. & Medalla, Erlinda M. & Aldaba, Rafaelita M. & del Prado, Fatima & Mantaring, Melalyn C. & Rosellon, Maureen Ane D. & Ledda, Veredigna M., 2015. "How Are Firms Responding to Philippine Free Trade Agreements?," Discussion Papers DP 2015-22, Philippine Institute for Development Studies.
    2. 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.
    3. 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.
    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. MUKUNOKI Hiroshi & OKOSHI Hirofumi, 2021. "Wake Not a Sleeping Lion: Free Trade Agreements and Decision Rights in Multinationals," Discussion papers 21036, Research Institute of Economy, Trade and Industry (RIETI).
    6. Kazunobu Hayakawa, 2020. "Production Networks and Utilization of Free Trade Agreements by Japanese Subsidiaries in ASEAN," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 16(1), pages 121-134, February.
    7. 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.
    8. Hiroshi Mukunoki & Hirofumi Okoshi, 2021. "Rules of origin and consumer‐hurting free trade agreements," The World Economy, Wiley Blackwell, vol. 44(8), pages 2303-2318, August.
    9. Gnangnon, Sèna Kimm, 2022. "Effect of the utilization of non-reciprocal trade preferences offered by the QUAD countries on beneficiary countries' economic complexity," Journal of the Japanese and International Economies, Elsevier, vol. 65(C).
    10. 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).
    11. Hiroshi Mukunoki & Hirofumi Okoshi, 2021. "Tariff elimination versus tax avoidance: free trade agreements and transfer pricing," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(5), pages 1188-1210, October.
    12. Mari Pangestu & Lili Yan Ing, 2016. "ASEAN: Regional Integration and Reforms," Asian Economic Papers, MIT Press, vol. 15(2), pages 44-60, Summer.
    13. 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).
    14. Hamzah, Hanny Zurina, 2012. "The Role of Japanese Automakers in Asean," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 46(1), pages 173-180.
    15. Legge, Stefan & Lukaszuk, Piotr, 2024. "The firm-level costs of utilizing free trade agreements," International Economics, Elsevier, vol. 178(C).
    16. 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.
    17. repec:era:eriabk:2021-impact-of-the-atiga-on-intra-asean-trade is not listed on IDEAS
    18. Lukaszuk, Piotr & Legge, Stefan, 2019. "Which Factors Determine the Utilization of Preferential Tariff Rates?," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203639, Verein für Socialpolitik / German Economic Association.
    19. 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).
    20. Ulloa, Alfie & Wagner, Rodrigo, 2012. "Why don't All Exporters Benefit from Free Trade Agreements?: Estimating Utilization Costs," IDB Publications (Working Papers) 4635, Inter-American Development Bank.
    21. 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).
    22. Jayant Menon, 2021. "ASEAN’s limited regional Integration spells globalisation, not Failure," Departmental Working Papers 2021-02, The Australian National University, Arndt-Corden Department of Economics.

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