Third-Country Effects of Regional Trade Agreements : A Firm-Level Analysis
Do regional trade agreements negatively impact non-members? This paper revisits this long-standing trade policy question using firm-level data and detailed information on the content of trade agreements. Differently from the conventional view on tr...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/110561574281995016/Third-Country-Effects-of-Regional-Trade-Agreements-A-Firm-Level-Analysis http://hdl.handle.net/10986/32673 |
| Summary: | Do regional trade agreements negatively
impact non-members? This paper revisits this long-standing
trade policy question using firm-level data and detailed
information on the content of trade agreements. Differently
from the conventional view on trade diversion, the analysis
identifies a positive spillover effect of regional trade
agreements: they increase the probability of export and
entry of third-country firms that previously exported to one
of the member countries. This spillover effect is driven by
deeper trade agreements, as they make member countries more
"similar" in terms of the regulatory environment.
Indeed, firms exporting regulation-intensive products
benefit disproportionately more from deep trade agreements
in destination markets, especially if the agreement includes
nondiscriminatory provisions and addresses regulatory issues. |
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