| ID | 086429 |
| Title Proper | Free trade agreements and vertical-specialisation in East Asia |
| Language | ENG |
| Author | Xinyi Li |
| Publication | 2009. |
| Summary / Abstract (Note) | Regional integration in East Asia has been described as 'market-led' integration driven by the activities of multinational corporations creating vertical specialisation. This paper investigates the effect of free trade agreements (FTAs) on vertical specialisation-based trade by employing a gravity estimation for a sample of nine East Asian countries plus the US. We find that FTAs promote international trade based on vertical specialisation and enhances deep integration between countries. The FTA effect on vertical specialisation-based trade increases with pre-agreement vertical linkage level, that is, the deeper the real integration between countries the larger the FTA impact. The results of this paper also suggest that deeper economic integrations, such as currency unions, will enhance trade based on vertical production by reducing the risk of exchange rate volatility. |
| `In' analytical Note | Asia Europe Journal Vol. 7, No. 1; Feb 2009: p.145-160 |
| Journal Source | Asia Europe Journal Vol. 7, No. 1; Feb 2009: p.145-160 |
| Key Words | Vertical-Specialisation ; Free Trade Agreements ; East Asia ; US ; Economic ; Regional Integration |