Do south-south trade agreements enhance member countries' trade? evaluating implications for development potential in the context of SAARC
AbstractThe South Asian Association for Regional Cooperation (SAARC) is the least integrated economy in the Asia-Pacific region, whose intraregional trade was only 5.6 per cent in 2006. In order to estimate potential trade of the SAARC Member Countries (SMCs), we have estimated “behind the border” and “beyond the border” constraints, which both appear to be quite significant in all SMCs. Given the level of “beyond the border” constraints, in the absence of full information on all “behind the border” constraints, the combined effect of the latter on actual exports of individual SAARC country is modeled in the gravity equation, which is estimated using the methods suggested in the literature for estimating stochastic frontier production function. Results of the stochastic frontier gravity model show that when FTA among SAARC countries becomes fully operational, smaller members will gain maximum benefits compared to larger members. The paper also analyses the synergy between trade and development goals of the SAARC countries. Since tariffs are not an important barrier in this region, emphasis should be given to liberalization of investment flows, higher technology cooperation, and cooperation in areas of education, literacy, basic health care, gender bias, favorable institutions ensuring good governance, social capital, transparency, transportation costs, infrastructure, to achieve the SAARC development goals (SDGs).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 37255.
Date of creation: 05 Nov 2009
Date of revision: 01 Oct 2010
SAARC; Development; RTA; PTA: FTA: Stochastic Frontier Analysis; Technology; Cooperation;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James E. Anderson & Eric van Wincoop, 2001.
"Gravity with Gravitas: A Solution to the Border Puzzle,"
NBER Working Papers, National Bureau of Economic Research, Inc
8079, National Bureau of Economic Research, Inc.
- James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, American Economic Association, vol. 93(1), pages 170-192, March.
- James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics, Boston College Department of Economics 485, Boston College Department of Economics.
- K. Kalirajan, 1999. "Stochastic varying coefficients gravity model: An application in trade analysis," Journal of Applied Statistics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 26(2), pages 185-193.
- Kawai, Masahiro, 2005. "East Asian economic regionalism: progress and challenges," Journal of Asian Economics, Elsevier, Elsevier, vol. 16(1), pages 29-55, February.
- Andrei A. Levchenko, 2004.
"Institutional Quality and International Trade,"
IMF Working Papers, International Monetary Fund
04/231, International Monetary Fund.
- Andrei A. Levchenko, 2007. "Institutional Quality and International Trade," Review of Economic Studies, Oxford University Press, Oxford University Press, vol. 74(3), pages 791-819.
- kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade, EconWPA 0503003, EconWPA.
- Raul Livas Elizondo & Paul Krugman, 1992.
"Trade Policy and the Third World Metropolis,"
NBER Working Papers, National Bureau of Economic Research, Inc
4238, National Bureau of Economic Research, Inc.
- Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-44, June.
- Yamazawa, Ippei, 1970. "Intensity Analysis of World Trade Flow," Hitotsubashi Journal of Economics, Hitotsubashi University, Hitotsubashi University, vol. 10(2), pages 61-90, February.
- Nilsson, Lars, 2000. "Trade integration and the EU economic membership criteria," European Journal of Political Economy, Elsevier, Elsevier, vol. 16(4), pages 807-827, November.
- Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 67(3), pages 474-81, August.
- Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, Elsevier, vol. 6(1), pages 21-37, July.
- Drysdale, Peter & Garnaut, Ross, 1982. "Trade Intensities and the Analysis of Bilateral Trade Flows in a Many-Country World : A Survey," Hitotsubashi Journal of Economics, Hitotsubashi University, Hitotsubashi University, vol. 22(2), pages 62-84, February.
- Das, Gouranga G., 2007. "Who leads and who lags? Technology Diffusion, E-commerce and Trade Facilitation in a model of Northern hub vis-à-vis Southern spokes," Journal of Economic Integration, Center for Economic Integration, Sejong University, Center for Economic Integration, Sejong University, vol. 22, pages 929-972.
- Geetha Vaidyanathan, 2008. "Technology parks in a developing country: the case of India," The Journal of Technology Transfer, Springer, Springer, vol. 33(3), pages 285-299, June.
- Arvind Panagariya, 2000. "Preferential Trade Liberalization: The Traditional Theory and New Developments," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 38(2), pages 287-331, June.
- Ryuhei Wakasugi, 2007. "Vertical Intra-Industry Trade and Economic Integration in East Asia," Asian Economic Papers, MIT Press, MIT Press, vol. 6(1), pages 26-39, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.