Article ID Journal Published Year Pages File Type
5083273 International Review of Economics & Finance 2016 45 Pages PDF
Abstract
The focus of this paper is on examining the effect of free trade agreements on bilateral vertical specialization (VS) in manufacturing between the U.S. and its trading partners. A bilateral VS variable is constructed using input-output analysis before being modeled in an augmented gravity equation. Results show that North American countries are by far the most significant trade partners with the U.S., followed by other Asian and Oceanic countries. The average treatment effect of a free trade agreement is 0.94, which shows that bilateral trade increases, on average, by 155% from a free trade agreement.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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