On trade creation and regional trade agreements: does depth matter?

Abstract

Regional trade agreements (RTAs) are usually classified according to their form into four broad categories: preferential arrangements, free trade agreements, customs unions and common markets. This paper investigates whether the form/ depth of RTAs matters concerning their effect on trade. I use a proper specification of the gravity model with panel data on the 1960–2000 period, which specifically control for self-selection into agreements. Results show that creating any kind of RTAs providing trade preferences to their member countries significantly increases bilateral trade. Nevertheless, their average treatment effect on bilateral trade does not significantly differ according to the depth of agreements

Determinants of the exports of Hungary: Trade theory and the gravity model

“…Empirical analyses focused on several factors influencing trade, such as borders (McCallum (1995); Wei (1996); Anderson-van Wincoop (2001); Mayer-Zignago (2005)), factor endowment (Rahman (2003); Schumacher (2003); Sohn (2005) ;Eicher et al (2012); Shirotori et al (2010)), common language and colonial linkages (Hutschinson (2002); Head et al (2010); Oh et al (2011);Felbermayr-Toubal (2006); Martinez-Zarzoso (2003)); institutions and corruption (AndersonMarcouiller (2002);de Groot et al (2004)); free trade agreements and regional integrations ((Martinez-Zarzoso (2003); Baier-Bergstrand (2007); Carrere (2006); Soloaga-Winters (2001) ;Jugurnath et al (2007); Coulibaly (2009) ;Anderson-Yotov (2011); Rose-van Wincoop (2001); Vicard (2009) ;Frankel-Wei (1998)). …”

The Role of Regional Economic Integrations for Trade Margins: A Case of Croatia

“…Frankel et al, 1996;Baier and Bergstrand, 2007;Magee, 2008;Vicard, 2009;Eicher et al, 2012;Baier et al, 2014). In general these studies confirm the trade creating effect of RTAs among the partner countries, while the evidence on trade diversion is more mixed.…”

Best practices for regional trade agreements

“…For a discussion of multilateralizing regionalism in the case of PECS, see Baldwin (2006) and Augier et al (2004Augier et al ( , 2006. 11 For empirical studies on trade effects of customs unions compared to FTAs, see Brown et al (2001), Ghosh and Yamarik (2004), Magee (2008), Vicard (2009), and Park and Park (2009). 12 For the empirical specification, we extend Rose (2004).…”