Impact of Free Trade Agreement Use on Import Prices:

This paper examines the impact of free trade agreement (FTA) use on import prices. For this analysis, it employs establishment-level import data with information on tariff schemes, that is, the FTA and most-favored-nation schemes used for importing. Unlike previous studies, this paper estimates the...

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Bibliographic Details
Main Author: Hayakawa, Kazunobu (Author)
Format: Electronic eBook
Language:English
Published: Washington, D.C The World Bank 2018
Series:World Bank E-Library Archive
Online Access:Volltext
Summary:This paper examines the impact of free trade agreement (FTA) use on import prices. For this analysis, it employs establishment-level import data with information on tariff schemes, that is, the FTA and most-favored-nation schemes used for importing. Unlike previous studies, this paper estimates the effects of FTA use on prices by controlling for differences in importing-firm characteristics. There are three main findings. First, the effect of FTA use is overestimated when not controlling for importing firm-related fixed effects. Second, on average, firms' FTA use reduces tariffs by 12 percentage points and raises import prices by 3.6-6.7 percent. Third, in general, a price rise resulting from the costs of complying with rules of origin was not found
Physical Description:1 Online-Ressource (58 Seiten)
DOI:10.1596/1813-9450-8416