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Trade Liberalization Along the Firm Size Distribution: The Case of the EU-South Korea FTA

Year: 2021

Type: article

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.

Source: Review of International Economics

DOI: 10.1111/roie.12690

Authors: Sonali Chowdhry, Gabriel Felbermayr

Institutions: German Institute for Economic Research, Kiel Institute for the World Economy, Austrian Institute of Economic Research

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $2,900