Consequence of Regional Trade Agreements to Developing Countries

Craig R. MacPhee (cmacphee@unl.edu) and Wanasin Sattayanuwat (wanasin@gmail.com)
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Craig R. MacPhee: University of Nebraska-Lincoln, Postal: Department of Economics, University of Nebraska-Lincoln, Lincoln, NE 68588-0489, U. S. A.
Wanasin Sattayanuwat: Srinakharinwirot University, Postal: School of Economics and Public Policy, Srinakharinwirot University, 114 Sukhumvit23, Bangkok 10110 Thailand

Journal of Economic Integration, 2014, vol. 29, 64-94

Abstract: We investigate the effects of 12 major Regional Trade Agreements (RTAs) on intraand extra-regional trade flows in member developing countries, both intra-RTA trade and the effect of RTAs on non-member trade over 1981~2008. We address and resolve statistical problems caused by logarithms, zero observations, and heteroskedasticity. Our regression results are not favorable to regional integration as a substitute for multilateral trade liberalization, although there are exceptions. Several RTAs fail to generate intrabloc trade creation. Seven of the 12 RTAs generate import trade diversion while most of the extra-bloc export dummies are not statistically significant. However, three of the five African RTAs in the sample increased intra-bloc trade. The differences in RTA performances are related to their implementation policies.

Keywords: Regional Trade Agreements; Gravity Models; Developing Countries (search for similar items in EconPapers)
JEL-codes: F15 O19 O57 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0622

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