How Do Exports and Imports Affect the Use of Free Trade Agreements? Firm-level Survey Evidence from Southeast Asia

Based on profit estimations, findings from a firm-level survey of 630 manufacturing firms across Association of Southeast Asian Nations (ASEAN) countries conducted in 2013 showed that a 1 percent increase in the share of exports in total sales will increase the probability of use of free trade agreements (FTAs) by 0.2 percent, whereas a 1 percent increase in the share of imports in total inputs will reduce the probability of use of FTAs by 0.4 percent. Results from locally weighted scatter plot smoothing (LOESS) show that the use of FTAs is tilde-shaped and negative-shaped as a function of exports and imports, respectively.

ERIA-DP-2016-01