IDEAS home Printed from https://ideas.repec.org/a/vrs/zirebs/v27y2024i2p353-373n1017.html
   My bibliography  Save this article

Impacts of Regional Trade Agreements on the Trade Effects of Financial Development

Author

Listed:
  • Zhang Juan

    (Shanghai University of International Business and Economics, Gubei Road 620, Shanghai, China.)

  • Chen Jiahui

    (Shanghai University of International Business and Economics, Gubei Road 620, Shanghai, China.)

  • Liu Zuanshi

    (East China University of Science and Technology, Meilong Road 130, Shanghai, China.)

Abstract

Regional trade agreements (RTAs) significantly reduce tariff and non-tariff barriers, facilitate capital flow and improve financing conditions, which can help exporters ease financing constraints and promote export. This paper studies the impacts of RTAs signed by member countries of Regional Comprehensive Economic Partnership Agreement (RCEP) on the trade effects of financial development, using the gravity model with industry level bilateral trade data from 2000 to 2021. The results show that with RTAs, exporters’ dependence on financial development of home countries has decreased, and there is a similar mechanism in importing countries. However, exporters’ decreasing dependence on financial development is different, i.e., the decreasing dependence of exporters in industries rely heavily on external financing is smaller than that in other industries.

Suggested Citation

  • Zhang Juan & Chen Jiahui & Liu Zuanshi, 2024. "Impacts of Regional Trade Agreements on the Trade Effects of Financial Development," Zagreb International Review of Economics and Business, Sciendo, vol. 27(2), pages 353-373.
  • Handle: RePEc:vrs:zirebs:v:27:y:2024:i:2:p:353-373:n:1017
    DOI: 10.2478/zireb-2024-0031
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/zireb-2024-0031
    Download Restriction: no

    File URL: https://libkey.io/10.2478/zireb-2024-0031?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. Allee, Todd & Peinhardt, Clint, 2011. "Contingent Credibility: The Impact of Investment Treaty Violations on Foreign Direct Investment," International Organization, Cambridge University Press, vol. 65(3), pages 401-432, July.
    2. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    Full references (including those not matched with items on IDEAS)

    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. John Schoeneman & Jami Fullerton, 2023. "Exploring relationships between nation branding and foreign direct investment," Place Branding and Public Diplomacy, Palgrave Macmillan, vol. 19(3), pages 266-279, September.
    2. De Masi, G. & Giovannetti, G. & Ricchiuti, G., 2013. "Network analysis to detect common strategies in Italian foreign direct investment," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(5), pages 1202-1214.
    3. Patricia Kotnik & Eva Hagsten, 2018. "ICT use as a determinant of export activity in manufacturing and service firms: Multi-country evidence," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(1), pages 103-128.
    4. Acar, Mustafa & Afyonoglu, Burcu & Kus, Savas & Vural, Bengisu, 2007. "Turkey’s Agricultural Integration with the EU: Quantifying the Implications," Conference papers 331657, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Yuegang Song & Songlin Jin & Zhenhui Li, 2022. "Venture Capital and Chinese Firms’ Technological Innovation Capability: Effective Evaluation and Mechanism Verification," Sustainability, MDPI, vol. 14(16), pages 1-20, August.
    6. Charlotte Emlinger & Viola Lamani, 2020. "International trade, quality sorting and trade costs: the case of Cognac," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(3), pages 579-609, August.
    7. Alexandre Janiak & Paulo Santos Monteiro, 2011. "Inflation and Welfare in Long‐Run Equilibrium with Firm Dynamics," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(5), pages 795-834, August.
    8. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.
    9. Dmitri Kirpichev & Enrique Moral-Benito, 2018. "The costs of trade protectionism: evidence from Spanish firms and non-tariff measures," Working Papers 1814, Banco de España.
    10. Tovar, Jorge, 2012. "Consumers’ Welfare and Trade Liberalization: Evidence from the Car Industry in Colombia," World Development, Elsevier, vol. 40(4), pages 808-820.
    11. Sourafel Girma & Yundan Gong & Holger Görg & Zhihong Yu, 2009. "Can Production Subsidies Explain China's Export Performance? Evidence from Firm‐level Data," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(4), pages 863-891, December.
    12. Masashige Hamano & Francesco Pappadà, 2023. "Exchange Rate Policy and Firm Heterogeneity," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(3), pages 759-790, September.
    13. Redding, Stephen & Weinstein, David, 2017. "Aggregating From Micro to Macro Patterns of Trade," CEPR Discussion Papers 12446, C.E.P.R. Discussion Papers.
    14. Cheptea, Angela & Emlinger, Charlotte & Latouche, Karine, 2014. "Do exporting firms benefit from retail internationalization? Evidence from France," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182706, European Association of Agricultural Economists.
    15. Yuko Imura, 2023. "Reassessing Trade Barriers with Global Production Networks," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 77-116, December.
    16. Bühler, Mathias, 2024. "Who Benefits from Free Trade?," World Development, Elsevier, vol. 179(C).
    17. Salman Haider & Aadil Ahmad Ganaie & Bandi Kamaiah, 2019. "Total Factor Productivity and Openness in Indian Economy: 1970–2011," Foreign Trade Review, , vol. 54(1), pages 46-57, February.
    18. Sean M. Dougherty, 2014. "Legal Reform, Contract Enforcement and Firm Size in Mexico," Review of International Economics, Wiley Blackwell, vol. 22(4), pages 825-844, September.
    19. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2018. "Global Firms," Journal of Economic Literature, American Economic Association, vol. 56(2), pages 565-619, June.
    20. Magnus Lodefalk & Fredrik Sjöholm & Aili Tang, 2022. "International trade and labour market integration of immigrants," The World Economy, Wiley Blackwell, vol. 45(6), pages 1650-1689, June.

    More about this item

    Keywords

    regional trade agreements (RTAs); financial development; trade; financial constraints;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

    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:vrs:zirebs:v:27:y:2024:i:2:p:353-373:n:1017. 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: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    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.