Regional trade agreements and exporters behavior: Evidence from some small islands developing states

Laurent Didier and Justinien Razafindravaosolonirina ()
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Justinien Razafindravaosolonirina: University of Reunion Island

Economics Bulletin, 2020, vol. 40, issue 4, 2637-2647

Abstract: This article assesses for the first time the impact of non-reciprocal and reciprocal regional trade agreements (RTAs), for four Small Island Developing States (SIDS), on the behavior of exporting firms. These countries are signatories to several trade agreements whose aim is to strengthen their regional integration and their participation to the world economy in order to alleviate their handicaps. Thus, the granting of trade preferences affects in the first place the exporting firms who wish to access these preferential markets. As these aspects are very underexplored by the literature, we rely on data from the World Bank (1997-2014) listing the characteristics of exporters both at the aggregated level and disaggregated by the merchandise trade products. Using panel gravity equations, the results highlighted the significance of RTAs on the behavior of these four SIDS exporting firms. We find mainly that South-South trade agreements (reciprocal and non-reciprocal) affect positively on exporting firms performance at the aggregated level of trade. The same is true for certain North-South (reciprocal) trade agreements for exporting firms in raw materials.

Keywords: regional trade agreements; exporting firms; SIDS; gravity model (search for similar items in EconPapers)
JEL-codes: F1 (search for similar items in EconPapers)
Date: 2020-10-12
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