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"Building" or "stumbling" blocks Analysis of the trade creation and trade diversion effect. The case of ASEAN-Korea free trade agreement (AKFTA)

Trinh, Jenni LU (2019) NEKH02 20191
Department of Economics
Abstract
Using trade data from the UNCTAD for 31 countries from 2000 to 2016, this study examines the success of the ASEAN-Korea FTA (AKFTA) by measuring the effect on import performance among member countries. A modified gravity model has been used to address both the issues of unobserved multilateral resistance terms and endogeneity biases to obtain consistent and efficient estimation results. The evidence suggests no evidence of trade effects as the thesis fails to provide statistically significant results. The thesis argues that insignificant trade effects relate to factors that dissuade firms from utilizing FTAs efficiently or at all. Thus, governments are recommended to take on a more proactive role in communicating trade policy to firms by... (More)
Using trade data from the UNCTAD for 31 countries from 2000 to 2016, this study examines the success of the ASEAN-Korea FTA (AKFTA) by measuring the effect on import performance among member countries. A modified gravity model has been used to address both the issues of unobserved multilateral resistance terms and endogeneity biases to obtain consistent and efficient estimation results. The evidence suggests no evidence of trade effects as the thesis fails to provide statistically significant results. The thesis argues that insignificant trade effects relate to factors that dissuade firms from utilizing FTAs efficiently or at all. Thus, governments are recommended to take on a more proactive role in communicating trade policy to firms by using such formats as education or outreach programs. Furthermore, the information should be complemented with guidance and direct assistance in the implementation and interpretation of policy in the practical everyday utilization of FTAs. (Less)
Please use this url to cite or link to this publication:
author
Trinh, Jenni LU
supervisor
organization
course
NEKH02 20191
year
type
M2 - Bachelor Degree
subject
keywords
AKFTA, trade creation, trade diverion, gravity model, utilization
language
English
id
8995310
date added to LUP
2019-10-25 09:07:31
date last changed
2019-10-25 09:07:31
@misc{8995310,
  abstract     = {{Using trade data from the UNCTAD for 31 countries from 2000 to 2016, this study examines the success of the ASEAN-Korea FTA (AKFTA) by measuring the effect on import performance among member countries. A modified gravity model has been used to address both the issues of unobserved multilateral resistance terms and endogeneity biases to obtain consistent and efficient estimation results. The evidence suggests no evidence of trade effects as the thesis fails to provide statistically significant results. The thesis argues that insignificant trade effects relate to factors that dissuade firms from utilizing FTAs efficiently or at all. Thus, governments are recommended to take on a more proactive role in communicating trade policy to firms by using such formats as education or outreach programs. Furthermore, the information should be complemented with guidance and direct assistance in the implementation and interpretation of policy in the practical everyday utilization of FTAs.}},
  author       = {{Trinh, Jenni}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{"Building" or "stumbling" blocks Analysis of the trade creation and trade diversion effect. The case of ASEAN-Korea free trade agreement (AKFTA)}},
  year         = {{2019}},
}