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Economic Integration and the Two Margins of Trade: The Impact of the Barcelona Process on North African Countries' Exports

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  • Sami Bensassi
  • Laura M�rquez-Ramos
  • Inmaculada Mart�nez-Zarzoso

Abstract

According to recently developed models of trade based on imperfect competition and heterogeneous firms, lower trade costs increase bilateral trade, not only through a rise in the mean value of individual shipments (the intensive margin of trade), but also through an increase in the number of exporting firms (the extensive margin of trade). The main aim of this paper is to provide new empirical evidence on the effects of the Euro-Mediterranean (EuroMed) agreements on both margins of trade. Using highly disaggregated export data for four North African countries (Algeria, Egypt, Morocco and Tunisia) over the 1995–2008 period, we estimate the impact of the EuroMed agreements on both trade margins, thus providing empirical evidence about the validity of theoretical predictions. Our results show that North African countries enjoyed significant positive returns from the Barcelona Process, through increased exports of manufactured products to the four most populated continental countries in the European Union. Copyright 2012 , Oxford University Press.

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Article provided by Centre for the Study of African Economies (CSAE) in its journal Journal of African Economies.

Volume (Year): 21 (2012)
Issue (Month): 2 (March)
Pages: 228-265

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Handle: RePEc:oup:jafrec:v:21:y:2012:i:2:p:228-265

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  1. David Hummels & Alexandre Skiba, 2002. "Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture," NBER Working Papers 9023, National Bureau of Economic Research, Inc.
  2. Katerina Gradeva & Inmaculada Martínez-Zarzoso, 2009. "Trade as Aid: The Role of the EBA-Trade Preferences Regime in the Development Strategy," Ibero America Institute for Econ. Research (IAI) Discussion Papers 197, Ibero-America Institute for Economic Research.
  3. Bernard Hoekman & Denise Eby Konan, 2005. "Deepening Egypt-US Trade Integration: Economic Implications of Alternative Options," Working Papers 200501, University of Hawaii at Manoa, Department of Economics.
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  5. Inmaculada Martinez-Zarzoso & Celestino Suarez-Burguet, 2005. "Transport costs and trade: Empirical evidence for Latin American imports from the European union," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 14(3), pages 353-371.
  6. Russell Hillberry & David Hummels, 2005. "Trade Responses to Geographic Frictions: A Decomposition Using Micro-Data," NBER Working Papers 11339, National Bureau of Economic Research, Inc.
  7. Martínez-Zarzoso, Inmaculada & Felicitas, Nowak-Lehmann D. & Horsewood, Nicholas, 2009. "Are regional trading agreements beneficial?: Static and dynamic panel gravity models," The North American Journal of Economics and Finance, Elsevier, vol. 20(1), pages 46-65, March.
  8. Inmaculada Martínez-Zarzoso & Gordon Wilmsmeier, 2008. "Determinants of Maritime Transport Costs. A Panel Data Analysis for Latin American Trade," Ibero America Institute for Econ. Research (IAI) Discussion Papers 172, Ibero-America Institute for Economic Research.
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  10. Hoekman, Bernard & Konan, Denise, 1999. "Deep Integration, Non-Discrimination and Euro-Mediterranean Free Trade," CEPR Discussion Papers 2095, C.E.P.R. Discussion Papers.
  11. Persson, Maria & Wilhelmsson, Fredrik, 2006. "Assessing the Effects of EU Trade Preferences for Developing Countries," Working Papers 2006:4, Lund University, Department of Economics, revised 26 Jun 2006.
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Cited by:
  1. Persson, Maria, 2012. "From trade preferences to trade facilitation: Taking stock of the issues," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 6(17), pages 1-33.
  2. Bourdet, Yves & Persson, Maria, 2011. "Reaping the Benefits of Deeper Euro-Med Integration Through Trade Facilitation," Working Papers 2011:15, Lund University, Department of Economics.
  3. Leila Baghdadi & Inmaculada Martínez-Zarzoso & Celestino Suárez-Burguet & Habib Zitouna, 2012. "Is the road to regional integration paved with pollution convergence?," Working Papers 2012/03, Economics Department, Universitat Jaume I, Castellón (Spain).
  4. Luis Marcelo Florensa & Laura Márquez-Ramos & María Luisa Recalde & María Victoria Barone, 2014. "Does economic integration increase trade margins? Empirical evidence from LAIAs countries," Working Papers 2014/05, Economics Department, Universitat Jaume I, Castellón (Spain).

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