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This study investigated the trade effects of Free Trade Agreements (FTAs) between Thailand and its trading partners. The important agricultural commodities rubber, cassava, fruit, vegetables and herbs were assessed from 1998 to 2019. In a traditional stochastic frontier model the two error components, of symmetric noise (𝜈𝑗) and a non-negative inefficiency (𝑢𝑗) are assumed to be independent. This may result in invalid inferences due to misspecification. To address this obstacle, Copula-based Gravity Stochastic Frontier models using panel criteria were constructed to estimate trade efficiency. Empirically, the Student t copula-based SFM minimizes both AIC and BIC. According to their mean TE, China and Japan had the highest export efficiencies (0.48) followed by India (0.41), New Zealand (0.39) and Australia (0.33) in rank order. Hence, Thailand should pursue more FTA negotiations with the trading partners. Moreover, they should promote miscellaneously behind-the-border barriers to stimulate flows of goods to enhance the country’s trade efficiency substantially.JEL Classification Code: F02, F13, F15, F41 |
