Short-Term and Long-Term Margins of International Trade: Evidence from the Canada-Chile Free Trade
We investigate the impact of the Canada-Chile Free Trade Agreement (CCFTA) on Canadian exports to Chile, particularly the dynamic effects of the agreement on extensive and intensive margins of trade. Consistent with the literature, we find that the extensive margin effects occurred later than the intensive margin effects and became more prominent in the long-term. Surprisingly, the intensive margin effects died off in the long-term. A theoretical model is constructed to show that our results can arise in a standard setting of intra-industry trade.
|Keywords||Preferential Trade Agreements, Margins of International Trade, Canada-Chile Trade, Nonparametric Decompositions, Regression Discontinuity.|
|JEL||Models of Trade with Imperfect Competition and Scale Economies (jel F12), Commercial Policy; Protection; Promotion; Trade Negotiations; International Organizations (jel F13)|
|Publisher||Department of Economics|
|Series||Carleton Economic Papers (CEP)|
Chen, Z, & Voia, M.-C. (2017). Short-Term and Long-Term Margins of International Trade: Evidence from the Canada-Chile Free Trade (No. CEP 18-01). Carleton Economic Papers (CEP). Department of Economics.