Do Free Trade Agreements Increase Economic Growth of the Member Countries?

Jung Hur; Cheolbeom Park

doi:10.1016/j.worlddev.2011.12.006

Do Free Trade Agreements Increase Economic Growth of the Member Countries?

Jung Hur, Cheolbeom Park

Department of Economics

Research output: Contribution to journal › Article › peer-review

19 Citations (Scopus)

Abstract

This paper assesses whether a bilateral FTA raises the growth rates of the two countries engaging in the FTA. A nonparametric matching approach, which imposes no specific functional forms and can be applied to a broad range of data structures, is employed to estimate the FTA effect on the growth. We find that FTAs exert insignificant effects on aggregated growth from one to 10. year period after launch, but detect a significant upward trend in the gap between the growth rates of per capita GDP within a bilateral FTA. This implies uneven FTA effects across countries within an FTA.

Original language	English
Pages (from-to)	1283-1294
Number of pages	12
Journal	World Development
Volume	40
Issue number	7
DOIs	https://doi.org/10.1016/j.worlddev.2011.12.006
Publication status	Published - 2012 Jul

Keywords

Convergence
Divergence
Free trade agreement
Growth
Matching
Treatment effect

ASJC Scopus subject areas

Geography, Planning and Development
Development
Sociology and Political Science
Economics and Econometrics

UN SDGs

This output contributes to the following Sustainable Development Goal(s)

Access to Document

10.1016/j.worlddev.2011.12.006

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@article{ffea6b86d5be44de8b515234381af0ca,

title = "Do Free Trade Agreements Increase Economic Growth of the Member Countries?",

abstract = "This paper assesses whether a bilateral FTA raises the growth rates of the two countries engaging in the FTA. A nonparametric matching approach, which imposes no specific functional forms and can be applied to a broad range of data structures, is employed to estimate the FTA effect on the growth. We find that FTAs exert insignificant effects on aggregated growth from one to 10. year period after launch, but detect a significant upward trend in the gap between the growth rates of per capita GDP within a bilateral FTA. This implies uneven FTA effects across countries within an FTA.",

keywords = "Convergence, Divergence, Free trade agreement, Growth, Matching, Treatment effect",

author = "Jung Hur and Cheolbeom Park",

note = "Funding Information: We are grateful to Yongsung Chang, Hyunbae Chun, Chirok Han, Edwin Lai, Chul-In Lee, Alan Woodland, Byung Sam Yoo, and three anonymous referees for their valuable comments and discussions. We would also like to thank conference and seminar participants at APTS2009, FESAMES 2009, and Yonsei University for the helpful discussions. Yun-jung Kim and Jina Yu have provided excellent research assistance. Jung Hur, the first author, would like to acknowledge the financial support from Sogang University Research Grant. The usual disclaimers apply. Copyright: Copyright 2012 Elsevier B.V., All rights reserved.",

year = "2012",

month = jul,

doi = "10.1016/j.worlddev.2011.12.006",

language = "English",

volume = "40",

pages = "1283--1294",

journal = "World Development",

issn = "1873-5991",