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Trade liberalization along the firm size distribution: The case of the EU‐South Korea FTA

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  • Sonali Chowdhry
  • Gabriel Felbermayr

Abstract

Leading theories suggest that amongst continuing exporters, lower variable trade costs should boost exports of smaller firms by the same or greater percentage rate than larger firms. However, investigating the impact of the deep EU‐South Korea FTA with French customs data, we find robust evidence to the contrary. Applying a triple‐difference framework, we report that the FTA increased sales in the top quartile of continuous exporters by 71.5% points more than in the bottom quartile. More than 90% of that growth premium is driven by reductions in NTBs. These findings suggest an additional channel driving the distributional effects of FTAs.

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  • Sonali Chowdhry & Gabriel Felbermayr, 2023. "Trade liberalization along the firm size distribution: The case of the EU‐South Korea FTA," Review of International Economics, Wiley Blackwell, vol. 31(5), pages 1751-1792, November.
    • Handle: RePEc:bla:reviec:v:31:y:2023:i:5:p:1751-1792
    DOI: 10.1111/roie.12690
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    Cited by:

    1. Timo Walter, 2022. "Trade and welfare effects of a potential free trade agreement between Japan and the United States," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(4), pages 1199-1230, November.
    2. Beniamino Quintieri & Giovanni Stamato, 2023. "Are preferential agreements beneficial to EU trade? New evidence from the EU–South Korea treaty," The World Economy, Wiley Blackwell, vol. 46(12), pages 3511-3541, December.
    3. Benjamin Jung, 2023. "The Trade Effects of the EU-South Korea Free Trade Agreement: Heterogeneity Across Time, Country Pairs, and Directions of Trade within Country Pairs," Open Economies Review, Springer, vol. 34(3), pages 617-656, July.
    4. Jung, Benjamin, 2022. "The Trade Effects of the EU-South Korea Free Trade Agreement: Heterogeneity across Time, Country Pairs, and Directions of Trade within Country Pairs," VfS Annual Conference 2022 (Basel): Big Data in Economics 264125, Verein für Socialpolitik / German Economic Association.

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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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