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The impact of tariff rates on the probability of trade relationships survival: evidence from ASEAN+6 manufactured goods

Lin, Chin-Ho (2015): The impact of tariff rates on the probability of trade relationships survival: evidence from ASEAN+6 manufactured goods.

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Abstract

This article explores the links between imported trade relationships, duration, and tariff rates. We investigate how the probability of survival of trade relationships affected due to the difference in the tariff rates based on survival analysis. Using ASEAN+6 as the reporter with 89 trading partners on manufactured goods from 1996 to 2011. A series of findings are as follows. First, low-tariff trade survives longer than high-tariff trade on manufactured goods. Second, a significantly negative correlation between tariff rates and duration is evidenced, which increases around 4% hazard ratios. Also, the reduction of tariff rates in intra-regional trade is helpful to prolong the length of trade relationships. Third, low tariff rates have 9.1% lower hazard ratios. We also obtain robust results in production networks and Rauch product’s classification. Finally, we consider these findings could be the references for other economic organizations, which is aimed at the diminution of tariff rates.

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