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Embrace or Not? An Empirical Study of the Impact of Globalization on the Country’s Sustainability in the Case of NAFTA

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  • Hexian Wang

    (School of Economics, The University of Sydney, Sydney 2006, Australia)

  • Wei Liu

    (Discipline of International Business, The University of Sydney, Sydney 2006, Australia
    School of Business, Wuyi University, Nanping 354300, China)

  • Mengyuan Zhu

    (School of Economics and Management, Harbin Institute of Technology, Weihai 264209, China)

  • Qing Wang

    (Melbourne Business School, The University of Melbourne, Melbourne 3053, Australia)

Abstract

This paper investigates the international trade role in economic development and sustainability. Specifically, a trade agreement is one of the most popular ways for a country to participate in trade, therefore we aim to estimate the relationship between a free trade agreement (FTA) and economic development on a country level, using the North American Free Trade Agreement as an example. Sustainability on an industrial level is also discussed in parallel. To achieve this, a counterfactual analysis is used to generate the welfare with and without the trade agreement to draw inference on the sustainability analysis. We find that the FTA does facilitate a country’s sustainability. However, it is less clear on an industrial level. This finding provides important evidence relating to a country’s sustainable development and has broadened the study scope regarding the impact of participating in an FTA with regard to economic sustainability.

Suggested Citation

  • Hexian Wang & Wei Liu & Mengyuan Zhu & Qing Wang, 2018. "Embrace or Not? An Empirical Study of the Impact of Globalization on the Country’s Sustainability in the Case of NAFTA," Sustainability, MDPI, vol. 10(10), pages 1-16, September.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:10:p:3436-:d:172222
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