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Firm-level trade creation and diversion of regional trade agreements in Thailand

Author

Listed:
  • Hayakawa, Kazunobu
  • Kimura, Fukunari
  • Laksanapanyakul, Nuttawut

Abstract

Using highly detailed import data for Thailand, this paper examines firm-level trade creation and diversion of regional trade agreements (RTAs). Specifically, by focusing on firm-product pairs in which firms import a particular product from non-members but not from RTA members in the initial year of our sample, we empirically investigate the start of imports from RTA members under RTA schemes and the cessation of imports from non-members at the firm-level. We find that firms are more likely to stop importing products with low RTA tariff rates or high most-favored-nation tariff rates from non-members and to start importing such products from RTA member countries. However, from the quantitative point of view, there are very few firms that switch import sources from non-members to RTA members when facing the introduction of RTA schemes.

Suggested Citation

  • Hayakawa, Kazunobu & Kimura, Fukunari & Laksanapanyakul, Nuttawut, 2016. "Firm-level trade creation and diversion of regional trade agreements in Thailand," IDE Discussion Papers 621, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper621
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    More about this item

    Keywords

    F53 - International Agreements and Observance; International Organizations; International trade; International agreements; International economic integration; RTA; Trade creation; Thailand;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration

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