Does the Use of Multiple FTAs Force Firms to Raise Local Input Share?: Evidence of the Spaghetti Bowl Phenomenon

Discussion Papers


by HAYAKAWA Kazunobu

August 2012


This paper empirically investigates the firm-level relationship between the local input share and the number of used FTAs by employing the data on FTA utilization in Japanese affiliates in ASEAN. As a result, we do not find a robust linear relationship. However, affiliates using a large number of FTAs (seven or eight) have an extremely higher share of local inputs. This result might be interpreted as the first evidence of the “spaghetti bowl phenomenon”.

Keywords: FTA; spaghetti bowl phenomenon
JEL classification: F15; F53; O53

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