How much do agreements matter for services trade?
AbstractWith an increasing number of Preferential Trade Agreements (PTAs) covering trade in services, we explore the impact of PTAs on services trade. To the best of our knowledge, this is the first paper in this literature that endogenizes the impact of preferentialism in estimating the trade effect. We also add to this literature by distilling the trade effect of PTAs into that emanating from services and “goods only” agreements and further confirm complementarities between the two. Moreover, we study these relationships disaggregated by the economic status of the partner countries and by the reciprocity of commitments. Our results suggest trade effects of 11.6 – 12.7% from having a services accord alone. They also reveal that the underlying services trade between countries has been driven as much by IRS as by factor differences and that asymmetric trade alliance between North-South partners has been successful in fostering inter-industry trade.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 32815.
Date of creation: 17 Jun 2009
Date of revision: 15 May 2010
Services trade; RTAs; gravity model; endogeneity; North-South;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F10 - International Economics - - Trade - - - General
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