Firm behaviour and market access in a Free Trade Area with rules of origin

Jiandong Ju and Kala Krishna ()

Canadian Journal of Economics, 2005, vol. 38, issue 1, 290-308

Abstract: We study a Free Trade Area with Rules of Origin and show that there are two distinct regimes. Comparative statics results for the two regimes are exact opposites and a regime switch occurs when become restrictive enough. Consequently, imports into the of the intermediate good first fall and then rise while the opposite pattern occurs for imports of the final good and for the price of the domestic input. We also show that tighter have opposite effects on the well-being of final versus intermediate good producers and producers inside versus outside the FTA.

JEL-codes: F13 F15 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (38)

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Related works:
Working Paper: Firm Behavior and Market Access in a Free Trade Area with Rules of Origin (1998)
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