The AFTA effect: trade diversion or trade creation?
Date
2010-03
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Abstract
This paper investigates the impact of the ASEAN Free Trade Area agreement to trade flows using the gravity model by a country panel data. Estimations report a positive correlation between GDPs and export flows. Also, countries with identical preferences exhibit higher trade than those with different ones. Moreover, result shows that trade creation is produced by AFTA among its members.
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Keywords
Trade, International trade, Trade diversion, Trade creation, AFTA effect, AFTA