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Evaluating Asian Free Trade Agreements: What Does Gravity Model Tell Us?

Author

Listed:
  • Sunder Ramaswamy
  • Abishek Choutagunta
  • Santosh Kumar Sahu

Abstract

This paper evaluates the performance of Free Trade Agreements (FTAs) by analysing the determinants of trade flows of Asian economies for a panel of 31 countries during 2007–2014 using a Gravity model. The estimated results suggest that certain FTAs negatively contribute to trade flows across the region and, that GDP and population, among other factors, can explain total trade flows. This study also finds that trade costs using distance as a proxy has a significant and negative effect on trade. Our results are in-line with the expectations which can be drawn by looking at trends of trade flows in Asia. Thus, a case is attempted for smoothening trade-flows across the region by reducing tariff and non-tariff barriers, pumping in investments on transport infrastructure and improving productivity of the partners as a whole which has positive effects on GDP and thus trade. JEL Codes: F13, F14, C23

Suggested Citation

  • Sunder Ramaswamy & Abishek Choutagunta & Santosh Kumar Sahu, 2021. "Evaluating Asian Free Trade Agreements: What Does Gravity Model Tell Us?," Foreign Trade Review, , vol. 56(1), pages 60-70, February.
    • Handle: RePEc:sae:fortra:v:56:y:2021:i:1:p:60-70
    DOI: 10.1177/0015732520961330
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    References listed on IDEAS

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    Cited by:

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    3. Koffi Dumor & Yao Li & Ma Yongkai & Enock Mintah Ampaw & Hafez Komla Dumor, 2022. "Evaluating the belt and road initiative effects on trade and migration: Evidence from the East African community," African Development Review, African Development Bank, vol. 34(1), pages 16-28, March.
    4. Chung Van Dong & Hoan Quang Truong, 2023. "Determinants and Potential of Seafood Trade: Evidence from a Transitional Economy," Foreign Trade Review, , vol. 58(3), pages 428-454, August.
    5. Christopher M. Dent, 2021. "Trade, Climate and Energy: A New Study on Climate Action through Free Trade Agreements," Energies, MDPI, vol. 14(14), pages 1-30, July.

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    More about this item

    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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