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Impacts of FTA utilization on firm performance

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  • Hayakawa, Kazunobu

Abstract

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.

Suggested Citation

  • Hayakawa, Kazunobu, 2012. "Impacts of FTA utilization on firm performance," IDE Discussion Papers 366, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  • Handle: RePEc:jet:dpaper:dpaper366
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    Cited by:

    1. Lukaszuk, Piotr & Legge, Stefan, 2019. "Which Factors Determine the Utilization of Preferential Tariff Rates?," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203639, Verein für Socialpolitik / German Economic Association.
    2. Lee, GaSeul & Lim, Song Soo, 2015. "FTA effects on agricultural trade with matching approaches," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 9, pages 1-26.
    3. Lili Yan Ing & Shujiro Urata & Yoshifumi Fukunaga, . "How Do Exports and Imports Affect the Use of Free Trade Agreements? Firm-level Survey Evidence from Southeast Asia," Chapters,, Economic Research Institute for ASEAN and East Asia (ERIA).
    4. Russel Kingshott & Piyush Sharma & Peter Hosie & Nebojsa Davcik, 2019. "Interactive impact of ethnic distance and cultural familiarity on the perceived effects of free trade agreements," Asia Pacific Journal of Management, Springer, vol. 36(1), pages 135-160, March.

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    More about this item

    Keywords

    Asia; International trade; International economic integration; International agreements; FTA; Microdata; Propensity score matching;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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