IDEAS home Printed from https://ideas.repec.org/p/udc/wpaper/wp555.html
   My bibliography  Save this paper

Exploring the Effects of FTAs on Chilean Exports: Heterogeneous responses and Financial Constraints

Author

Listed:
  • Roberto Alvarez
  • Eugenia Andreasen

Abstract

In this paper, we examine the influence of Free Trade Agreements (FTAs) on Chilean exports during the past thirty years. Over the last three decades, Chile has entered into 31 FTAs with 65 countries, encompassing nearly 90% of global GDP. Despite this, there's a notable absence of empirical evidence regarding the extent and nature of the impact of these agreements on export volumes and product diversification. With a rich dataset encompassing bilateral trade flows at the product-level and key financial indicators, we employ a differencein-differences approach to provide robust evidence of the positive impact of these FTAs on export levels and the variety of products exported. Our analysis also reveals variations in these effects based on the industries' initial export share and trading partners' income levels. Furthermore, we investigate how FTAs interacted with the financial development and capital control policies of trading partners, demonstrating their role in mitigating financial constraints on trade.

Suggested Citation

  • Roberto Alvarez & Eugenia Andreasen, 2024. "Exploring the Effects of FTAs on Chilean Exports: Heterogeneous responses and Financial Constraints," Working Papers wp555, University of Chile, Department of Economics.
    • Handle: RePEc:udc:wpaper:wp555
    as

    Download full text from publisher

    File URL: https://econ.uchile.cl/uploads/publicacion/52de18e454e4ce53d69dd5ef685a60e784f2c727.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
    2. Andrew K. Rose, 2004. "Do We Really Know That the WTO Increases Trade?," American Economic Review, American Economic Association, vol. 94(1), pages 98-114, March.
    3. Amir Lebdioui, 2019. "Chile's Export Diversification since 1960: A Free Market Miracle or Mirage?," Development and Change, International Institute of Social Studies, vol. 50(6), pages 1624-1663, November.
    4. Chaney, Thomas, 2016. "Liquidity constrained exporters," Journal of Economic Dynamics and Control, Elsevier, vol. 72(C), pages 141-154.
    5. repec:hal:spmain:info:hdl:2441/5g3sadr9h8gbri8hrtq0h6au2 is not listed on IDEAS
    6. Baier, Scott L. & Bergstrand, Jeffrey H. & Clance, Matthew W., 2018. "Heterogeneous effects of economic integration agreements," Journal of Development Economics, Elsevier, vol. 135(C), pages 587-608.
    7. Dingemans, Alfonso & Ross, César, 2012. "Free trade agreements in Latin America since 1990: an evaluation of export diversification," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    8. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
    9. Manova, Kalina, 2008. "Credit constraints, equity market liberalizations and international trade," Journal of International Economics, Elsevier, vol. 76(1), pages 33-47, September.
    10. Jean, Sébastien & Mulder, Nanno & Ramos, María Priscila, 2014. "A general equilibrium, ex-post evaluation of the EU–Chile Free Trade Agreement," Economic Modelling, Elsevier, vol. 41(C), pages 33-45.
    11. Kenta Yamanouchi, 2019. "Heterogeneous Impacts of Free Trade Agreements: The Case of Japan," Asian Economic Papers, MIT Press, vol. 18(2), pages 1-20, Summer.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Duc Bao Nguyen & Anne‐Gaël Vaubourg, 2021. "Financial intermediation, trade agreements and international trade," The World Economy, Wiley Blackwell, vol. 44(3), pages 788-817, March.
    2. Christine Côté & Saul Estrin & Daniel Shapiro, 0. "Expanding the international trade and investment policy agenda: The role of cities and services," Journal of International Business Policy, Palgrave Macmillan, vol. 0, pages 1-25.
    3. Christine Côté & Saul Estrin & Daniel Shapiro, 2020. "Expanding the international trade and investment policy agenda: The role of cities and services," Journal of International Business Policy, Palgrave Macmillan, vol. 3(3), pages 199-223, September.
    4. Dutt, Pushan, 2020. "The WTO is not passé," European Economic Review, Elsevier, vol. 128(C).
    5. Cote, Christine & Estrin, Saul & Shapiro, Daniel, 2020. "Expanding the international trade and investment policy agenda: the role of cities and services," LSE Research Online Documents on Economics 104003, London School of Economics and Political Science, LSE Library.
    6. Head, Keith & Mayer, Thierry, 2014. "Gravity Equations: Workhorse,Toolkit, and Cookbook," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 131-195, Elsevier.
    7. Clougherty, Joseph A. & Grajek, Michał, 2014. "International standards and international trade: Empirical evidence from ISO 9000 diffusion," International Journal of Industrial Organization, Elsevier, vol. 36(C), pages 70-82.
    8. Baier, Scott L. & Bergstrand, Jeffrey H. & Feng, Michael, 2014. "Economic integration agreements and the margins of international trade," Journal of International Economics, Elsevier, vol. 93(2), pages 339-350.
    9. Bergstrand, Jeffrey H. & Larch, Mario & Yotov, Yoto V., 2015. "Economic integration agreements, border effects, and distance elasticities in the gravity equation," European Economic Review, Elsevier, vol. 78(C), pages 307-327.
    10. Chang, Pao-Li & Lee, Myoung-Jae, 2011. "The WTO trade effect," Journal of International Economics, Elsevier, vol. 85(1), pages 53-71, September.
    11. Pei‐Yu Chi & Ting‐Yu Chang & Kuo‐I Chang, 2022. "Evaluating the impact of preferential trade agreement on fishery imports: An application of difference‐in‐differences with matching method," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 90-124, January.
    12. Moelders, Florian, 2011. "Trade Persistence and the Limits of Trade Agreements," Proceedings of the German Development Economics Conference, Berlin 2011 58, Verein für Socialpolitik, Research Committee Development Economics.
    13. Rahel Aichele & Gabriel Felbermayr, 2015. "Kyoto and Carbon Leakage: An Empirical Analysis of the Carbon Content of Bilateral Trade," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 104-115, March.
    14. Firat Demir & Chenghao Hu, 2016. "Institutional Differences and the Direction of Bilateral Foreign Direct Investment Flows: Are South–South Flows any Different than the Rest?," The World Economy, Wiley Blackwell, vol. 39(12), pages 2000-2024, December.
    15. Hendrik W. Kruse & Inmaculada Martínez‐Zarzoso, 2021. "Transfers in the gravity equation," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 410-442, February.
    16. Ridwan Ah Sheikh & Sunil Kanwar, 2024. "Do Deep Trade Agreements with Intellectual Property Provisions Actually Increase International Trade?," Working papers 344, Centre for Development Economics, Delhi School of Economics.
    17. McDougall, Brendan S. & Afesorgbor, Sylvanus Kwaku, 2020. "The Effect of Free Trade Agreements on the Intensive and Extensive Margins of Canadian Agri-Food Trade," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304486, Agricultural and Applied Economics Association.
    18. (ed.), 0. "Research Handbook on Economic Diplomacy," Books, Edward Elgar Publishing, number 16053.
    19. Hur, Jung & Alba, Joseph D. & Park, Donghyun, 2010. "Effects of Hub-and-Spoke Free Trade Agreements on Trade: A Panel Data Analysis," World Development, Elsevier, vol. 38(8), pages 1105-1113, August.
    20. Juyoung Cheong & Do Won Kwak & Kam Ki Tang, 2015. "Can Trade Agreements Curtail Trade Creation and Prevent Trade Diversion?," Review of International Economics, Wiley Blackwell, vol. 23(2), pages 221-238, May.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:udc:wpaper:wp555. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mohit Karnani (email available below). General contact details of provider: https://edirc.repec.org/data/deuclcl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.