The impact of the U.S.—Canada free trade agreement on the large and small U.S. firms in the textiles, computer, oil gas, and auto industries Article

cited authors

  • Hamid, S; Mathis, R; Dandapani, K; Prakash, A

abstract

  • This paper investigates the potential impact of the U.S.—Canada free trade agreement on large and small firms in the U.S. textile, oil and gas, computer, and auto industries by utilizing a methodology involving stock price data. The large firms in the textile, oil and gas, and computer industries had the most pronounced impact. In general, the potential benefits of free trade appear to increase with size and the bigger firms exhibit larger potential benefits. The significant abnormal risk adjusted changes in the value of stocks indicate that the market viewed the prospect of free trade with Canada favorably for the textile and computer industries, but less favorably for the auto and the oil and gas industry. The results of the ex-ante methodology are consistent with the ex-post U.S.—Canada trade data on surpluses in the textile and computer industries, and trade deficits in the oil and automobile industries, that persisted after the enactment of the treaty. © 1997 Taylor & Francis Group, LLC.

publication date

  • January 1, 1997

Digital Object Identifier (DOI)

start page

  • 221

end page

  • 246

volume

  • 11

issue

  • 2