The DR-CAFTA and the Extensive Margin : A Firm-level Analysis

This paper examines the export behavior of Dominican Republic exporters following the implementation of the Dominican Republic-Central America Free Trade Agreement in 2007. Using a firm-level dataset for 2002-2009, the authors investigate the effects of a tariff reduction on the extensive margin. The analysis distinguishes the impact on the entry of new firms, exports of new products, and entry into the Agreement s markets. The paper analyzes whether the agreement prevents incumbent exporters from exiting the market. The results suggest that tariff cuts had a positive although very small effect on the extensive margin. A decline in tariffs also seems to reduce the probability of exit, but the effect is also small. The evidence calls for complementary policies aiming at helping exporters maximize the benefits of the agreement.

Bibliographic Details

Main Authors:	Molina, Ana Cristina, Bussolo, Maurizio, Iacovone, Leonardo
Language:	English
Published:	2010-06-01
Subjects:	AGGREGATE EXPORTS, AGRICULTURAL PRODUCTS, APPAREL, APPAREL EXPORTS, BILATERAL TRADE, BUSINESS ENVIRONMENT, CENTRAL BANK, COMMON MARKET, COMPARATIVE ADVANTAGE, COMPARATIVE ADVANTAGE INDEX, COMPARATIVE DISADVANTAGE, COMPETITIVENESS, CREDIT CONSTRAINTS, CUSTOMS, CUSTOMS AUTHORITIES, DEVELOPED COUNTRIES, DEVELOPING COUNTRIES, DEVELOPMENT BANK, DUTY FREE, DUTY REDUCTION, ECONOMIC CRISIS, ECONOMIC POLICY, EQUILIBRIUM, EXCHANGE RATE, EXCHANGE RATE DEPRECIATION, EXPORT COSTS, EXPORT DEMAND, EXPORT DIVERSIFICATION, EXPORT DYNAMICS, EXPORT FLOWS, EXPORT GROWTH, EXPORT MARKET, EXPORT MARKETS, EXPORT PATTERNS, EXPORT PERFORMANCE, EXPORT SECTORS, EXPORT VALUE, EXPORT ZONE, EXPORTER, EXPORTERS, EXPORTS, FEDERAL RESERVE, FEDERAL RESERVE BANK, FOREIGN MARKETS, FREE ACCESS, FREE TRADE, FREE TRADE AGREEMENT, FREE TREATMENT, IMPACT OF TRADE, IMPORT COSTS, IMPORT PRICES, IMPORT TARIFF, IMPORT TARIFFS, IMPORTS, INTERNATIONAL BANK, INTERNATIONAL TRADE, MARKET ACCESS, MARKET DIVERSIFICATION, MARKET ENTRY, MARKET POSITION, NON-TARIFF BARRIERS, POLITICAL ECONOMY, PREFERENTIAL ACCESS, PRICE FLUCTUATIONS, REGIONAL INTEGRATION, REGIONAL TRADE, REGIONAL TRADE AGREEMENTS, RULES OF ORIGIN, SALE, SALES, SPREAD, TARIFF BARRIERS, TARIFF CUTS, TARIFF DATA, TARIFF LEVELS, TARIFF PREFERENCES, TARIFF REDUCTION, TARIFF REDUCTIONS, TARIFF SCHEDULE, TARIFF SCHEDULES, TOTAL SALES, TRADE AGREEMENT, TRADE BARRIERS, TRADE COSTS, TRADE CREATION, TRADE DATA, TRADE DIVERSIFICATION, TRADE DIVERSION, TRADE EFFECTS, TRADE EXPANSION, TRADE FLOWS, TRADE LIBERALIZATION, TRADE PARTNERS, TRADE PARTNERSHIP, TRADE POLICY, TRADE PREFERENCES, TRADE REGIME, TRADE RELATIONSHIP, TRADE RELATIONSHIPS, TRADE VALUE, TRANSPORT COSTS, TREATY, TRUST FUND, VALUE OF EXPORTS, WORLD TRADE, WORLD TRADE ORGANIZATION,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100827150309 https://hdl.handle.net/10986/3889
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