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Impacts of FTA utilization on firm performance

Kazunobu Hayakawa ()

No 366, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: The international export and investment activities of firms have been widely studied by scholars. In particular, prior studies have focused on two main hypotheses about firms engaged in international activities such as exporting and investing abroad; namely, self-selection of more productive firms into international activities and learning-by-doing international activities. This paper is the first study that explores these hypotheses in regard to firms’ use of free trade agreements (FTAs). We first estimate the propensity score for firms’ use of FTA schemes, and find that larger firms are more likely to participate. Then, by conducting matching analysis using the propensity scores, we find that the use of FTA schemes does not change employment in firms, but does result in more local inputs used and increased exports.

Keywords: Asia; International trade; International economic integration; International agreements; FTA; Microdata; Propensity score matching (search for similar items in EconPapers)
JEL-codes: F15 F53 O53 (search for similar items in EconPapers)
Date: 2012-08-01
New Economics Papers: this item is included in nep-bec, nep-int and nep-sea
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 366. 2012-08-01

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Journal Article: Impacts of FTA Utilization on Firm Performance (2015) Downloads
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