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Trade Performance of Free Trade Zones

Author

Listed:
  • Jean-Marc Siroën

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Aycil Yücer

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

Abstract

Free trade zones (FTZ) have become widespread with the liberalisation of international trade andinvestment. They are a key player in the deepening of the global value chain (GVC). However, little isknown about their contribution to world trade due to a lack of information on their location and status.This paper sets out to improve knowledge in this area by analysing the trade performance of FTZcountries at macro-level with a focus on FTZ externalities and distortive costs. We have built anoriginal database of FTZs where we define them as processing zones benefiting from import tariffincentives. We show that FTZs raise trade only by easing the negative impact of protection. Asimporters of components and raw materials, they raise the rest of the world's exports. This confirmsthe contribution of FTZs to the GVC. This result is robust to a change in the model specification,errors and bias due to data collection issues and sample composition.

Suggested Citation

  • Jean-Marc Siroën & Aycil Yücer, 2017. "Trade Performance of Free Trade Zones," Working Papers hal-01487320, HAL.
    • Handle: RePEc:hal:wpaper:hal-01487320
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    Citations

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    Cited by:

    1. Cavalcanti Teixeira, Louisiana, 2019. "Labor standards and social conditions in free trade zones: The case of the Manaus free trade zone," Economics Discussion Papers 2019-69, Kiel Institute for the World Economy.
    2. Jane Du & Cheng King & Xinxiang Shi, 2023. "Prosper or beggar thy neighbour: Industrial policy effect of free trade zones," PLOS ONE, Public Library of Science, vol. 18(10), pages 1-10, October.
    3. Bei Wang & Hong Chen & Ruiqi Chen & Weiting Zeng & Lechuan Ye, 2023. "Does the Green Development of Cities Need High-Level Opening Up? A Quasi-Natural Experiment Based on China’s Pilot Free Trade Zone," Sustainability, MDPI, vol. 15(7), pages 1-20, March.
    4. Izotov, D., 2018. "The Desire to Speed up the Russian Far Eastern Economy: Will the "New" Institutional Conditions Help?," Journal of the New Economic Association, New Economic Association, vol. 38(2), pages 155-163.
    5. World Bank, 2016. "Moldova Trade Study," World Bank Publications - Reports 24006, The World Bank Group.
    6. Louisiana Cavalcanti Teixeira, 2020. "Labor standards and social conditions in free trade zones: the case of the Manaus free trade zone," Post-Print hal-02997102, HAL.
    7. Teixeira, Louisiana Cavalcanti, 2020. "Labor standards and social conditions in free trade zones: The case of the Manaus free trade zone," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 14, pages 1-41.

    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
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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