Revisiting the Effects of Regional Trade Agreements Using Staggered Adoption Design

Kaleb Abreha and Raymond Robertson ()
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Kaleb Abreha: Texas A&M University
Raymond Robertson: Texas A&M University, The Bush School of Government and Public Service

Atlantic Economic Journal, 2025, vol. 53, issue 3, No 1, 113-124

Abstract: Abstract Studies on regional trade agreements find heterogeneous trade-promoting effects that depend on the terms of the agreements, sectors and products covered, and the characteristics of signatory countries. The agreements also have different enforcement dates and implementation periods, affecting the identification, estimation, size, and interpretation of their effect on trade. This paper builds on recent advances in the difference-in-differences estimation to explicitly account for any heterogeneous and time-varying effects and multiple implementation periods of trade agreements. Using bilateral trade data between 1962 and 2020 from the Centre d'Études Prospectives et d'Informations Internationales, the estimates show an effect of about 25–30% 10 years after implementation, which is larger than the standard two-way fixed estimates. The estimates also show phasing-in effects, in which the effects become larger over time. Furthermore, accounting for anticipation of the agreements affects the timing, size, and significance of these phasing-in effects. Overall, these results highlight the adjustment process for trade policies to take effect.

Keywords: Regional trade agreements; Difference-in-differences; Staggered adoption design; Gravity model (search for similar items in EconPapers)
JEL-codes: F13 F14 F63 O24 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11293-025-09828-0

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