Sungbae An, Korea Institute for International Economic Policy: Until the 2008–09 global financial crisis, the global trade share (i.e., the value of merchandise trade as a share of global GDP) was on an upward trend. Globalization was suggested as a main driver in explaining the trend, and free trade agreements (FTAs) were considered key ingredients. The work by Yamanouchi investigates the trade creation effects of FTAs by Japan during the period 1996–2015. As pointed out in the paper, an analysis of Japan's FTAs can be meaningful because they cover recent periods when regionalism and bilateralism become prominent, and because various partner countries are involved, which allows heterogeneous effects of FTAs to be considered. A gravity model using three ways of fixed effects is estimated via the Poisson pseudo maximum likelihood method to capture the FTA effect:
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