Short-Term and Long-Term Margins of International Trade: Evidence from the Canada-Chile Free Trade Agreement

Zhiqi Chen a, Marcel C. Voia b 

Author information


a Department of Economics, Carleton University, Ottawa, Ontario, K1S 5B6, Canada

b Department of Economics, Carleton University, Ottawa, Ontario, K1S 5B6, Canada

E-mail: zhiqi.chen@carleton.ca (Zhiqi Chen), marcel.voia@carleton.ca (Marcel C. Voia)


Abstract


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 


Cite this article


Zhiqi Chen, Marcel C. Voia. Short-Term and Long-Term Margins of International Trade: Evidence from the Canada-Chile Free Trade Agreement. Front. Econ. China, 2018, 13(1): 93‒115 https://doi.org/10.3868/s060-007-018-0008-2

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