Firm-Specific Trade Effects of Economic Integration Agreements: Estimating Extensive and Intensive Margins of Trade

SUNIL DASH

Authors

SUNIL DASH Faculty of Economics, Chulalongkorn University, Thailand

Keywords:

Economic Integration Agreements, International Trade, Firm Margins, Economic Integration Agreements; International Trade; Extensive Margins; Intensive Margins, Intensive Margins

Abstract

By utilizing panel statistics of 1520 country pairs and economic integration agreements (EIAs) from 2007 to 2017, this paper presents evidence of the effect of EIAs on export margins, i.e., both extensive (firms) and intensive margins (average exports per firm). In doing so, this work adds empirical support to the relevant literature on trade margins and sheds light on a new “firm” aspect of trade margins concerning EIAs. Estimating a structural gravity model with exporter-time, importer-time, and country-pair fixed effects reveals that EIAs primarily increase the average exports per firm but have a smaller impact on the number of exporting firms. It further examines whether different “types” of EIAs have different effects on these margins and uncovers that the higher the degrees of integration agreements, the stronger the impact on average exports per firm.

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