EconPapers    
Economics at your fingertips  
 

On the relationship between the breadth of PTAs and trade flows

Rodney Falvey () and Neil Foster-McGregor ()

No 38, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: This paper uses matching econometrics to extend the literature investigating the impact of Preferential Trading Arrangements (PTAs) on goods trade flows. Heterogeneity in PTAs is accounted for through a 'provision count index' derived from data provided in a recent World Bank study (Hofmann et al, 2017). PTA formation now involves two separate, sequential decisions - first, whether two trading partners should form a PTA and, second, if they do, how broad that agreement should be. We find that our explanatory variables are significant for both decisions, but often have opposing effects on each. Using our matched PTA and non-PTA groups of country-pairs, we estimate a dose response function which indicates that arrangements with few provisions and arrangements with many provisions do not appear to have a significant impact on goods trade flows between their members. PTAs in an intermediate range are shown to have a significant positive effect. We then relate these outcomes to the actual content of the PTAs using the concept of 'provision intensity'.

Keywords: Preferential Trade Agreements; Trade Flows; PTA Breadth (search for similar items in EconPapers)
JEL-codes: F10 F15 O24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2017-09-15
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.merit.unu.edu/publications/wppdf/2017/wp2017-038.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2017038

Access Statistics for this paper

More papers in MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) Contact information at EDIRC.
Bibliographic data for series maintained by Ad Notten ().

 
Page updated 2019-12-06
Handle: RePEc:unm:unumer:2017038