Deeper integration: What effects on trade?
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Title
Deeper integration: What effects on trade?Date
2011-03Publisher
Hochschule St. Gallen für Wirstchafts- und SocialwissenschaftenISSN
0004-8216Another identifiers
http://search.proquest.com/docview/896268677/fulltextPDF/13A40351AA81796C06C/3?accountid=15297Bibliographic citation
Aussenwirtschaft, 66. 1 (Mar 2011): 7-32,140Type
info:eu-repo/semantics/articlePublisher version
http://search.proquest.com/docview/896268677?accountid=15297Subject
JEL subject
Abstract
The focus of this paper is to estimate the effect of the different types of regional trade agreements on the volume of trade between country pairs. The analysis will employ the "empirical workhorse" of international ... [+]
The focus of this paper is to estimate the effect of the different types of regional trade agreements on the volume of trade between country pairs. The analysis will employ the "empirical workhorse" of international trade; the gravity model. We hypothesize that the deeper agreements have a stronger effect on trade, especially when considering the extensive margin on trade. When controlling for the extensive margin of trade, the multilateral trade resistance terms, and the endogeneity bias we are able to obtain satisfyingly accurate treatment effects of the different types of regional trade agreements. Using a panel of 50 countries over the period 1980-1999, we find that customs unions, "deep" free trade agreements, and common markets have stronger effects on bilateral trade than simple free trade agreements. [-]
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