Firm-level Impact of Free Trade Agreements on Import Prices

Kazunobu Hayakawa, Nuttawut Laksanapanyakul and Shujiro Urata
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Nuttawut Laksanapanyakul: Science and Technology Development Program, Thailand Development Research Institute, Thailand

No DP-2015-33, Working Papers from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: We examine the firm-level impact of the use of free trade agreement (FTA) schemes on import prices by employing firm-level import data that enables us to identify the use of different tariff schemes, such as FTA schemes and most favoured nation (MFN) schemes. Unlike the previous studies, we estimate the firm-level effects of FTA use on import prices by controlling for firms’ characteristics. We find that, on average, the use of FTA schemes raises (tariffexclusive) import prices by 3 percent in total. Interestingly, the use of FTA schemes raises import prices even if FTA rates are same as MFN rates. We also find that the large-sized firms in terms of import values reduce the positive effects of the use of FTA schemes on import prices.

Keywords: FTA; Prices; Thailand (search for similar items in EconPapers)
JEL-codes: F15 F33 (search for similar items in EconPapers)
Pages: 38 pages.
Date: 2015-04
New Economics Papers: this item is included in nep-int and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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