Are the New Trading Blocs Building or Stumbling Blocks ? A Gravity Model Using Panel Data

Jérôme Trotignon ()
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Jérôme Trotignon: Université de Lyon, Lyon, F-69003, France; CNRS, GATE, UMR 5824, Ecully, F-69130, France

No 933, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: We will be asking ourselves if the trading blocs created or renewed since the end of the 1980s favor the multilateralization of trade, and so constitute building or stumbling blocks. In a gravity model using panel data, we estimate a set of three regional dummies representative of intra-bloc trade, extra-bloc exports and extra-bloc imports. Taking the resulting three coefficients as a starting point, we propose an original typology of trade creations / diversions and of trading blocs. In applying it to our results, all the groups chosen as well as the Economic and Monetary Union, are shown to be building blocks. No trade diversion is noted, with the exception of an export diversion brought about by North American Free Trade Agreement.

Keywords: trade integration; gravity model; trade creation / diversion; building / stumbling blocks (search for similar items in EconPapers)
JEL-codes: C23 F13 F15 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2009
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:0933

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