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The impact of EU trade preferences on the extensive and intensive margins of agricultural and food products

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  • Margherita Scoppola
  • Valentina Raimondi
  • Alessandro Olper

Abstract

In this article, we study the trade creation effects of EU preferential trade agreements (PTAs) in the agriculture and food sectors for a large sample of developing countries in the period 1990–2006. We investigate the extent to which the PTAs affect trade through the extensive margin—number of exported products—or the intensive margin—volume of existing products. We use a gravity framework in a panel data setting, and different estimators to deal with the issues of zero trade flows and the presence of an upper bound in the dependent variable. The results show that EU PTAs positively affect the extensive margin in agricultural trade, but not in processed foods. As regards the intensive margin, the effect is driven by the role of tariffs alone, whereas the other provisions of PTAs do not exert any other significant impact on agricultural or food products.

Suggested Citation

  • Margherita Scoppola & Valentina Raimondi & Alessandro Olper, 2018. "The impact of EU trade preferences on the extensive and intensive margins of agricultural and food products," Agricultural Economics, International Association of Agricultural Economists, vol. 49(2), pages 251-263, March.
    • Handle: RePEc:bla:agecon:v:49:y:2018:i:2:p:251-263
    DOI: 10.1111/agec.12413
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    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • C0 - Mathematical and Quantitative Methods - - General

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