Economic Integration Effects on Trade Margins: Sectoral Evidence from Latin America

Laura Márquez-Ramos, Luis Marcelo Florensa () and María Luisa Recalde ()
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Luis Marcelo Florensa: Universidad Nacional de Córdoba, Postal: Instituto de Economía y Finanzas, Universidad Nacional de Córdoba, Av.Valparaíso s/n, Ciudad Universitaria, X5000HRV Córdoba, Argentina
María Luisa Recalde: Universidad Nacional de Córdoba, Postal: Instituto de Economía y Finanzas- Universidad Nacional de Córdoba, Av.Valparaíso s/n, Ciudad Universitaria, X5000HRV Córdoba, Argentina,

Journal of Economic Integration, 2015, vol. 30, issue 2, 269-299

Abstract: The present paper aims to determine the effects of different levels of economic integration on the intensive and the extensive margins of trade. Specifically, the analysis focuses on the case of Latin America. It is of great importance for development policies in the region since the extensive margin can be defined as those exports that provide new market entrants, while the intensive margin is due to continued growth in sales of old exporters to the same destinations. Therefore, obtained results have important policy implications related to diversification strategies. The long-term period considered will allow us to determine whether different effects on trade margins might arise in the following two sub-periods: 1962~1989 and from 1990 onwards, i.e. before and after the spread of regional integration agreements and the deepening of the liberalization process in the region. Finally, we focus on those specific sectors in which Latin American countries present a higher relative participation of trade. The obtained results show that the effect of economic integration is both time and period sensitive. The main positive effects are found to be reflected in the intensive margin for all different types of agreements. Moreover, we find that deeper economic integration agreements have the greatest effect on trade margins.

Keywords: Economic Integration; Extensive Margin; Intensive Margin; Latin America; Panel Data (search for similar items in EconPapers)
JEL-codes: F14 F15 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0659

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