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Impacts of FTA utilization on firm performance

  • Hayakawa, Kazunobu

The international export and investment activities of firms have been widely studied by scholars. In particular, prior studies have focused on two main hypotheses about firms engaged in international activities such as exporting and investing abroad; namely, self-selection of more productive firms into international activities and learning-by-doing international activities. This paper is the first study that explores these hypotheses in regard to firms’ use of free trade agreements (FTAs). We first estimate the propensity score for firms’ use of FTA schemes, and find that larger firms are more likely to participate. Then, by conducting matching analysis using the propensity scores, we find that the use of FTA schemes does not change employment in firms, but does result in more local inputs used and increased exports.

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File URL: http://ir.ide.go.jp/dspace/bitstream/2344/1182/1/ARRIDE_Discussion_No.366_hayakawa.pdf
File Function: First version, 2012
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Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 366.

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Date of creation: Aug 2012
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Publication status: Published in IDE Discussion Paper. No. 366. 2012.8
Handle: RePEc:jet:dpaper:dpaper366
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  1. Guglielmo Caporale & Christophe Rault & Robert Sova & Anamaria Sova, 2009. "On the bilateral trade effects of free trade agreements between the EU-15 and the CEEC-4 countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 145(2), pages 189-206, July.
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