IDEAS home Printed from https://ideas.repec.org/a/sae/padigm/v26y2022i1p70-88.html

Factors Determining Utilization of Free Trade Agreements by Indian Textile and Clothing Companies: A Conceptual Framework Model

Author

Listed:
  • Parul Bajaj
  • Anuj Sharma

Abstract

The study focusses on the determinants to the use of trade agreements by Indian textile and clothing companies. A primary sample survey of 310 export companies was conducted in major clusters. Subsequently a conceptual framework model was developed to understand the various determinants influencing the use of trade agreements by the textile and clothing export firms in India. The study identified 8 dimensions of impediments, 4 determinants of costs, 5 benefits and 11 enablers to the use of trade agreements. A binary regression modelling was performed on the data set to identify the critical factors, which determine the usage of trade agreements using SPSS 16. The results obtained showed that the probability of usage of trade agreements decreased with documentation costs, cost associated with time to obtain preferential certificate, non-tariff barriers in partner countries and lack of knowledge. The probability of usage was positively significant for gaining new buyers under the agreements, government outreach, support from public sector bodies and ease in issuance of certificates. This study will provide a foundation to understand the determinants of usage of trade agreements in future. We conclude that a more SME centric approach will help in making trade agreements more inclusive.

Suggested Citation

  • Parul Bajaj & Anuj Sharma, 2022. "Factors Determining Utilization of Free Trade Agreements by Indian Textile and Clothing Companies: A Conceptual Framework Model," Paradigm, , vol. 26(1), pages 70-88, June.
    • Handle: RePEc:sae:padigm:v:26:y:2022:i:1:p:70-88
    DOI: 10.1177/09718907221102651
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/09718907221102651
    Download Restriction: no
    File URL: https://libkey.io/10.1177/09718907221102651?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Paul R. Krugman, 1991. "The move toward free trade zones," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 7-58.
    3. Bhagwati, Jagdish, 2008. "Termites in the Trading System: How Preferential Agreements Undermine Free Trade," OUP Catalogue, Oxford University Press, number 9780195331653.
    4. Suwendrani Jayaratne & Deshal De Mel & Dharshani Premaratne, 2011. "Utilization of Trade Agreements in Sri Lanka: Perceptions of Exporters vs. Statistical Measurements," Working Papers 9611, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    5. Mishita Mehra & Prithvijit Mukherjee & Saon Ray, 2016. "Upgrading in the Indian Garment Industry: A Study of Three Clusters," Working Papers id:10818, eSocialSciences.
    6. Menaka Arudchelvan & Ganeshan Wignaraja, 2015. "SME Internationalization through Global Value Chains and Free Trade Agreements: Malaysian Evidence," ADBI Working Papers 515, Asian Development Bank Institute.
    7. Hofmann, Claudia & Osnago, Alberto & Ruta, Michele, 2019. "The Content of Preferential Trade Agreements," World Trade Review, Cambridge University Press, vol. 18(3), pages 365-398, July.
    8. Kasteng, Jonas & Kokko, Ari & Tingvall, Patrik, 2022. "Who Uses the EU's Free Trade Agreements? A Transaction-Level Analysis of the EU–South Korea FTA," World Trade Review, Cambridge University Press, vol. 21(1), pages 93-108, February.
    9. Raymond Riezman, 1999. "Can Bilateral Trade Agreements Help Induce Free Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 32(3), pages 751-766, May.
    10. Yunling Zhang & Minghui Shen, 2011. "The Status of East Asian Free Trade Agreements," Trade Working Papers 23254, East Asian Bureau of Economic Research.
    11. Yunling Zhang & Minghui Shen, 2011. "The Status of East Asian Free Trade Agreements," Governance Working Papers 23254, East Asian Bureau of Economic Research.
    12. Wei, Shang-Jin & Frankel, Jeffrey A., 1996. "Can regional blocs be a stepping stone to global free trade? a political economy analysis," International Review of Economics & Finance, Elsevier, vol. 5(4), pages 339-347.
    13. Yunling Zhang & Minghui Shen, 2011. "The Status of East Asian Free Trade Agreements," ADBI Working Papers 282, Asian Development Bank Institute.
    14. 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.
    15. Manchin, Miriam & Pelkmans-Balaoing, Annette O., 2007. "Rules of origin and the web of East Asian free trade agreements," Policy Research Working Paper Series 4273, The World Bank.
    16. Deshal De Mel & Suwendrani Jayaratne & Dharshani Premaratne, 2011. "Utilization of Trade Agreements in Sri Lanka: Perceptions of Exporters vs. Statistical Measurements," ARTNeT Working Papers 96, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rajat Kathuria & Neha Gupta, 2026. "Enhancing India's Trade Competitiveness through Inclusive Liberalisation," Working Papers DP-2025-10, Economic Research Institute for ASEAN and East Asia (ERIA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Masahiro Kawai & Ganeshan Wignaraja, 2014. "Policy challenges posed by Asian free trade agreements: a review of the evidence," Chapters, in: Richard Baldwin & Masahiro Kawai & Ganeshan Wignaraja (ed.), A World Trade Organization for the 21st Century, chapter 8, pages 182-238, Edward Elgar Publishing.
    2. Hamanaka, Shintaro, 2012. "Evolutionary paths toward a region-wide economic agreement in Asia," Journal of Asian Economics, Elsevier, vol. 23(4), pages 383-394.
    3. Baldwin, Richard & Jaimovich, Dany, 2012. "Are Free Trade Agreements contagious?," Journal of International Economics, Elsevier, vol. 88(1), pages 1-16.
    4. Koumtingué, Nelnan, 2010. "Proliferation of preferential trade agreements: an empirical analysis," MPRA Paper 68917, University Library of Munich, Germany, revised 08 Aug 2014.
    5. United Nations ESCAP, 2011. "Post-crisis Protectionism in the Region," STUDIES IN TRADE AND INVESTMENT, in: United Nations ESCAP (ed.), Asia-Pacific Trade and Investment Report 2011: Post-crisis trade and investment opportunities, chapter 3, pages 33-43, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    6. repec:era:eriabk:2021-impact-of-the-atiga-on-intra-asean-trade is not listed on IDEAS
    7. Jeffrey J. Schott & Minsoo Lee & Julia Muir, 2012. "Prospects for Services Trade Negotiations," ADB Economics Working Paper Series 319, Asian Development Bank.
    8. Richard Baldwin, 2008. "Big-Think Regionalism: A Critical Survey," NBER Working Papers 14056, National Bureau of Economic Research, Inc.
    9. Innwon Park, 2011. "Is AFTA a Desirable Regional Trade Agreement for ASEAN?," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 14(4), pages 49-72, December.
    10. Dupont, Cédric, 2011. "What role for regional economic organizations in a fragmented trade world? The case of ASEAN," Papers 242, World Trade Institute.
    11. Ka Zeng & Yue Lu & Ya‐wei Li, 2021. "Trade agreements and Global Value Chain (GVC) participation: Evidence from Chinese industries," Economics and Politics, Wiley Blackwell, vol. 33(3), pages 533-582, November.
    12. Ganeshan Wignaraja, 2013. "Regional Trade Agreements and Enterprises in Southeast Asia," Trade Working Papers 23718, East Asian Bureau of Economic Research.
    13. Rana, Arslan Tariq & Kebewar, Mazen, 2014. "The Political Economy of FDI flows into Developing Countries: Does the depth of International Trade Agreements Matter?," EconStor Preprints 91501, ZBW - Leibniz Information Centre for Economics.
    14. Zakaria Sorgho, 2016. "RTAs' Proliferation and Trade-diversion Effects: Evidence of the ‘Spaghetti Bowl’ Phenomenon," The World Economy, Wiley Blackwell, vol. 39(2), pages 285-300, February.
    15. Jagdambe, Subhash & Kannan, Elumalai, 2020. "Effects of ASEAN-India Free Trade Agreement on agricultural trade: The gravity model approach," World Development Perspectives, Elsevier, vol. 19(C).
    16. Scott L. Baier & Narendra R. Regmi, 2023. "Using Machine Learning to Capture Heterogeneity in Trade Agreements," Open Economies Review, Springer, vol. 34(4), pages 863-894, September.
    17. Ruhu A Salim & Mohammad Mahfuz Kabir, 2011. "Does More Trade Potential Remain in Arab States of the Gulf ?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 26, pages 217-243.
    18. 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.
    19. Sorgho, Zakaria, 2014. "RTAs’ Proliferation and Trade-diversion effects: Evidence of the “Spaghetti Bowl” Phenomenon," MPRA Paper 60503, University Library of Munich, Germany.
    20. Stender, Frederik & Vogel, Tim, 2023. "What role for aid for trade in (deep) PTA relations? Empirical evidence from gravity model estimations," IDOS Discussion Papers 13/2023, German Institute of Development and Sustainability (IDOS).
    21. David Tsirekidze, 2021. "Global supply chains, trade agreements and rules of origin," The World Economy, Wiley Blackwell, vol. 44(11), pages 3111-3140, November.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:padigm:v:26:y:2022:i:1:p:70-88. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.