Economic Integration Agreements and Extensive Margin of Export: An Empirical Study of India

Nivedita Mullick () and Areej A. Siddiqui ()
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Nivedita Mullick: Indian Institute of Foreign Trade, New Delhi,India
Areej A. Siddiqui: Indian Institute of Foreign Trade, New Delhi,India

No 2155, Working Papers from Indian Institute of Foreign Trade

Abstract: Changes in trade costs are an intended consequence of formation & participation in Economic Integration Agreements (EIAs). This paper attempts to examine the ex-post effects (owing to the reduced trade costs) of the agreements that India has been a part of, on the extensive margin of export. Additionally, the present study examines if deeper agreements impact extensive export margin by a greater degree than shallower agreements. The time period spanning from 2012 to 2018 used for our study, together with the trading country pairs makes for a panel dataset which helps in accounting for unobserved heterogeneity. Inclusion of separate dummy for economic integration agreements of varying depth, allows for heterogeneity across EIAs and inclusion of fixed effects in our gravity model framework helps to account for the factors that would have otherwise been neglected. The results of our study show that One-way Preferential Trade Agreement, Two-way Preferential Trade Agreement & Free Trade Agreement, all have significant impact on the extensive export margin with deeper agreements (Free Trade Agreements and Two-Way Preferential Trade Agreement) having a larger impact than the shallower agreements (One-Way Preferential Trade Agreement).

Keywords: Economic Integration Agreements; Trade Margins; Gravity Model (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2021
New Economics Papers: this item is included in nep-int
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