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Measuring fixed costs for firms' use of a free trade agreement : threshold regression approach

  • Hayakawa, Kazunobu

In this paper, by employing the threshold regression method, we estimate the average tariff equivalent of fixed costs for the use of a free trade agreement (FTA) among all existing FTAs in the world. It is estimated to be 3.2%. This global estimate serves as a reference rate in the evaluation of each FTA’s fixed costs.

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Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 275.

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Date of creation: Jan 2011
Date of revision:
Publication status: Published in IDE Discussion Paper. No. 275. 2011. 1
Handle: RePEc:jet:dpaper:dpaper275
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  1. Olivier Cadot & Jaime de Melo, 2015. "Why OECD Countries Should Reform Rules of Origin," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 16, pages 381-409 World Scientific Publishing Co. Pte. Ltd..
  2. Céline CARRERE & Jaime MELO DE, 2004. "Are Different Rules of Origin Equally Costly? Estimates from NAFTA," Working Papers 200412, CERDI.
  3. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 441-487.
  4. Medvedev, Denis, 2006. "Preferential trade agreements and their role in world trade," Policy Research Working Paper Series 4038, The World Bank.
  5. James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
  6. 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.
  7. Francois, Joseph & Hoekman, Bernard & Manchin, Miriam, 2005. "Preference erosion and multilateral trade liberalization," Policy Research Working Paper Series 3730, The World Bank.
  8. Joao Santos Silva & Silvana Tenreyro, 2005. "The Log of Gravity," CEP Discussion Papers dp0701, Centre for Economic Performance, LSE.
  9. Rubinstein, Yona & Helpman, Elhanan & Melitz, Marc, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," Scholarly Articles 3228230, Harvard University Department of Economics.
  10. Bruce E. Hansen, 1996. "Sample Splitting and Threshold Estimation," Boston College Working Papers in Economics 319., Boston College Department of Economics, revised 12 May 1998.
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