Assessment of Export Eff ects Based on Chow Statistical Test Applied to Free Trade Agreements

Abstract

 The paper  is devoted to the study of export effects in the context of the Chile-Republic of Korea and Peru-China free trade agreements (FTAs) using Chow's statistical tests. The article analyzes the export volumes of subheading 740311 HS from Chile to South Korea and 230120 HS from Peru to China, respectively. The choice of research objects is due to the relative proximity of the export structure of Latin American countries and Russia.

The Chow test allows to assess the presence/absence of statistically significant changes in the linear trend of export in specified goods before and after the conclusion of free trade agreements.  Using the Chow tests, it is shown that 1) structural changes in linear trend of exports of subheading 740311 of the HS to South Korea are statistically significant after the entry into force of the Chile-Republic of Korea FTA agreement and 2) statistically insignificant after the entry into force of the Peru-China FTA in relation to subheading 230120.

It is shown that relying only on the use of statistical data, bypassing economic and other aspects, cannot provide a comprehensive analysis of the effectiveness of agreements on FTA. However, the inclusion of these factors in the research process contributes to the formation of conclusions necessary for making informed decisions about the creation of a free trade area.