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Firm-level trade creation and diversion of regional trade agreements in Thailand

Kazunobu Hayakawa (), Fukunari Kimura () and Laksanapanyakul Nuttawut

No 621, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: Using highly detailed import data for Thailand, this paper examines firm-level trade creation and diversion of regional trade agreements (RTAs). Specifically, by focusing on firm-product pairs in which firms import a particular product from non-members but not from RTA members in the initial year of our sample, we empirically investigate the start of imports from RTA members under RTA schemes and the cessation of imports from non-members at the firm-level. We find that firms are more likely to stop importing products with low RTA tariff rates or high most-favored-nation tariff rates from non-members and to start importing such products from RTA member countries. However, from the quantitative point of view, there are very few firms that switch import sources from non-members to RTA members when facing the introduction of RTA schemes.

Keywords: F53 - International Agreements and Observance; International Organizations,International trade,International agreements,International economic integration,RTA,Trade creation,Thailand (search for similar items in EconPapers)
JEL-codes: F15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-int and nep-sea
Date: 2016-11
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 621. 2016-11

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