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Chile - Korea FTA: extensive and intensive margins analysis

Author
Munoz, Felipe

Cáceres, Javiera

López, Dorotea

Full text
https://www.rae-ear.org/index.php/rae/article/view/902
Abstract
This paper analyzes the impact of the Chile-Korea Free Trade Agreement (CKFTA) over the bilateral extensive and intensive margins of trade. For this purpose, it defines as extensive margin those trade flows established after the entry into force of the agreement (i.e. products not traded before 2004), while the intensive margin refers to the growth of  exports of existing products in the bilateral relation. To estimate these effects, a Poisson-Pseudo Maximum Likelihood model is proposed. Using disaggregated product data (6-digit HS system) for the period 1996-2017, the paper tests the impact of the agreement on bilateral flows, as well as differentiated this effect between intensive and extensive margin. It is found that the CKFTA had a positive effect over bilateral trade flows, and although new products were added to the bilateral export basket (extensive margin), the impact is stronger on goods already been traded (intensive margin).
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Discipline
Artes, Arquitectura y UrbanismoCiencias Agrarias, Forestales y VeterinariasCiencias Exactas y NaturalesCiencias SocialesDerechoEconomía y AdministraciónFilosofía y HumanidadesIngenieríaMedicinaMultidisciplinarias
Institutions
Universidad de ChileUniversidad Católica de ChileUniversidad de Santiago de ChileUniversidad de ConcepciónUniversidad Austral de ChileUniversidad Católica de ValparaísoUniversidad del Bio BioUniversidad de ValparaísoUniversidad Católica del Nortemore

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