Do Free Trade Agreements Increase Australian Trade: An Application of Poisson Pseudo Maximum Likelihood Estimator?. Issue 1 (2nd January 2020)

• Record Type: Journal Article
• Authors: Timsina, Krishna P.; Culas, Richard J.
• Is Part Of: Journal of East-West business. Volume 26:Issue 1(2020)
• Page Start: 56
• Page End: 80
• Publication Date: 2020-01-02
• Subjects: Australia -- dynamic effect -- gravity model -- panel data -- sectoral effect -- trade agreements; East-West trade -- Periodicals; International business enterprises -- Periodicals; Investments, Foreign -- Periodicals; 337.4701713
• DOI: 10.1080/10669868.2019.1685056
• Languages: English
• ISSNs: 1066-9868

Abstract

Abstract: This article examines the effects of Australia's free trade agreements on trade creation and export diversion of the total as well as sectoral trade. The empirical analysis implemented through Poisson pseudo maximum likelihood estimator with time and country-specific effects. Results showed the standard gravity variables are highly significant with the expected signs. Overall, the trade creation effects were greater than intra-block export diversion effects of FTAs on Australia's total trade. The trade creation effects of FTAs on the agricultural sector seems higher than the nonagricultural sector in Australia after deducting intra-block export diversion effects in the respective sectors.