Trade Creation, Replacement, and Destruction in Regional Trade Agreements: Micro-Level Evidence for the UK

17 Pages Posted: 30 Dec 2007

See all articles by Sourafel Girma

Sourafel Girma

Nottingham University Business School

Richard Kneller

University of Nottingham

Mauro Pisu

OECD; Leverhulme Centre for Research on Globalisation and Economic Policy; National Bank of Belgium

Abstract

Empirical questions surrounding the effect of regional trade agreements on international trade have typically been answered with reference to macro-level gravity equations. Prominent within this has been whether they create or divert trade. In this paper, motivated by the recent development of theories of export-platform FDI, we use micro-level data to explore the part of trade diversion that follows from FDI. Using information on acquisition FDI in the UK manufacturing sector between 1988 and 1998 we find evidence of trade creation, replacement, and destruction from FDI external and internal to the EU.

Suggested Citation

Girma, Sourafel and Kneller, Richard and Pisu, Mauro, Trade Creation, Replacement, and Destruction in Regional Trade Agreements: Micro-Level Evidence for the UK. Review of International Economics, Vol. 16, Issue 1, pp. 142-158, February 2008. Available at SSRN: https://ssrn.com/abstract=1079390 or http://dx.doi.org/10.1111/j.1467-9396.2007.00732.x

Sourafel Girma (Contact Author)

Nottingham University Business School ( email )

Jubilee Campus
Nottingham, NG8 1BB
United Kingdom
+44 0 115 8466656 (Phone)

HOME PAGE: http://www.nottingham.ac.uk/~lizsmg/

Richard Kneller

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Mauro Pisu

OECD ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Leverhulme Centre for Research on Globalisation and Economic Policy ( email )

University of Nottingham
School of Economics
Nottingham, NG7 2RD
United Kingdom

National Bank of Belgium ( email )

Research Department
Boulevard de Berlaimont 14
Brussels, 1000
Belgium

Register to save articles to
your library

Register

Paper statistics

Downloads
24
Abstract Views
301
PlumX Metrics