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Short-Term and Long-Term Margins of International Trade: Evidence from the Canada-Chile Free Trade Agreement -forthcoming in Frontiers of Economics in China

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Abstract

We investigate the impact of the Canada-Chile Free Trade Agreement (CCFTA) on Canadian exports to Chile, particularly the dynamic effects of the agreement on extensive and intensive margins of trade. Consistent with the literature, we find that the extensive margin effects occurred later than the intensive margin effects and became more prominent in the long-term. Surprisingly, the intensive margin effects died off in the long-term. A theoretical model is constructed to show that our results can arise in a standard setting of intra-industry trade.

Suggested Citation

  • Zhiqi Chen & Marcel-Cristian Voia, 2018. "Short-Term and Long-Term Margins of International Trade: Evidence from the Canada-Chile Free Trade Agreement -forthcoming in Frontiers of Economics in China," Carleton Economic Papers 18-01, Carleton University, Department of Economics.
    • Handle: RePEc:car:carecp:18-01
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    Keywords

    Preferential Trade Agreements; Margins of International Trade; CanadaChile Trade; Nonparametric Decompositions; Regression Discontinuity;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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