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Does the use of multiple FTAs force firms to raise local input share?: Evidence of the spaghetti bowl phenomenon

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  • Hayakawa, Kazunobu

Abstract

This paper empirically investigates the firm-level relationship between the local input share and the number of used FTAs by employing the data on FTA utilization in Japanese affiliates in ASEAN. As a result, we do not find a robust linear relationship. However, affiliates using a large number of FTAs (seven or eight) have an extremely higher share of local inputs. This result might be interpreted as the first evidence of the “spaghetti bowl phenomenon”.

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  • Hayakawa, Kazunobu, 2013. "Does the use of multiple FTAs force firms to raise local input share?: Evidence of the spaghetti bowl phenomenon," Economic Modelling, Elsevier, vol. 33(C), pages 458-461.
    • Handle: RePEc:eee:ecmode:v:33:y:2013:i:c:p:458-461
    DOI: 10.1016/j.econmod.2013.04.041
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    References listed on IDEAS

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    1. Gordon H. Hanson & Raymond J. Mataloni & Matthew J. Slaughter, 2005. "Vertical Production Networks in Multinational Firms," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 664-678, November.
    2. Olivier Cadot & Jaime de Melo, 2015. "Why OECD Countries Should Reform Rules of Origin," World Scientific Book Chapters,in: Developing Countries in the World Economy, chapter 16, pages 381-409 World Scientific Publishing Co. Pte. Ltd..
    3. 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.
    4. Kiyota, Kozo & Matsuura, Toshiyuki & Urata, Shujiro & Wei, Yuhong, 2008. "Reconsidering the Backward Vertical Linkages of Foreign Affiliates: Evidence from Japanese Multinationals," World Development, Elsevier, vol. 36(8), pages 1398-1414, August.
    5. Demidova, Svetlana & Krishna, Kala, 2008. "Firm heterogeneity and firm behavior with conditional policies," Economics Letters, Elsevier, vol. 98(2), pages 122-128, February.
    6. Bhagwati, Jagdish & Greenaway, David & Panagariya, Arvind, 1998. "Trading Preferentially: Theory and Policy," Economic Journal, Royal Economic Society, vol. 108(449), pages 1128-1148, July.
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    Cited by:

    1. Kazunobu Hayakawa & Nuttawut Laksanapanyakul, 2017. "Impacts of common rules of origin on FTA utilization," International Economics and Economic Policy, Springer, vol. 14(1), pages 75-90, January.
    2. Archanun KOHPAIBOON & Juthathip JONGWANICH, 2015. "Use of FTAs from Thai Experience," Working Papers DP-2015-02, Economic Research Institute for ASEAN and East Asia (ERIA).

    More about this item

    Keywords

    FTA; Spaghetti bowl phenomenon;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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