Embrace or Not? An Empirical Study of the Impact of Globalization on the Country’s Sustainability in the Case of NAFTA

Hexian Wang, Wei Liu, Mengyuan Zhu and Qing Wang
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Hexian Wang: School of Economics, The University of Sydney, Sydney 2006, Australia
Wei Liu: Discipline of International Business, The University of Sydney, Sydney 2006, Australia
Mengyuan Zhu: School of Economics and Management, Harbin Institute of Technology, Weihai 264209, China
Qing Wang: Melbourne Business School, The University of Melbourne, Melbourne 3053, Australia

Sustainability, 2018, vol. 10, issue 10, 1-16

Abstract: This paper investigates the international trade role in economic development and sustainability. Specifically, a trade agreement is one of the most popular ways for a country to participate in trade, therefore we aim to estimate the relationship between a free trade agreement (FTA) and economic development on a country level, using the North American Free Trade Agreement as an example. Sustainability on an industrial level is also discussed in parallel. To achieve this, a counterfactual analysis is used to generate the welfare with and without the trade agreement to draw inference on the sustainability analysis. We find that the FTA does facilitate a country’s sustainability. However, it is less clear on an industrial level. This finding provides important evidence relating to a country’s sustainable development and has broadened the study scope regarding the impact of participating in an FTA with regard to economic sustainability.

Keywords: international trade; sustainability; economic development; NAFTA; FTA (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:10:y:2018:i:10:p:3436-:d:172222

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