IDEAS home Printed from https://ideas.repec.org/a/ioe/cuadec/v46y2009i133p3-33.html

Gravity, Bilateral Agreements, and Trade Diversion in the Americas

Author

Listed:
  • Raymond Robertson
  • Antoni Estevadeordal.

Abstract

Krishna (1998) shows that a bilateral agreement between two countries render a multilateral agreement less attractive if the bilateral agreement is trade diverting. This paper combines Krishna’s model with the empirical approach of Anderson and va

Suggested Citation

  • Raymond Robertson & Antoni Estevadeordal., 2009. "Gravity, Bilateral Agreements, and Trade Diversion in the Americas," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 46(133), pages 3-33.
    • Handle: RePEc:ioe:cuadec:v:46:y:2009:i:133:p:3-33
    as

    Download full text from publisher

    File URL: http://www.economia.uc.cl/docs/133robea.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jeffrey A. Frankel, 1998. "The Regionalization of the World Economy," NBER Books, National Bureau of Economic Research, Inc, number fran98-1, September.
    2. Simon J. Evenett & Wolfgang Keller, 2002. "On Theories Explaining the Success of the Gravity Equation," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 281-316, April.
    3. Wilfred J. Ethier, 1998. "Regionalism in a Multilateral World," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1214-1245, December.
    4. Pravin Krishna, 1998. "Regionalism and Multilateralism: A Political Economy Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 227-251.
    5. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    6. Gordon H. Hanson & Chong Xiang, 2004. "The Home-Market Effect and Bilateral Trade Patterns," American Economic Review, American Economic Association, vol. 94(4), pages 1108-1129, September.
    7. Antoni Estevadeordal & Caroline Freund & Emanuel Ornelas, 2008. "Does Regionalism Affect Trade Liberalization Toward Nonmembers?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(4), pages 1531-1575.
    8. Andrew K. Rose, 2004. "Do We Really Know That the WTO Increases Trade?," American Economic Review, American Economic Association, vol. 94(1), pages 98-114, March.
    9. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2003. "Multilateral, Regional and Bilateral Trade‐Policy Options for the United States and Japan," The World Economy, Wiley Blackwell, vol. 26(6), pages 803-828, June.
    10. Ethier, Wilfred J, 1998. "The New Regionalism," Economic Journal, Royal Economic Society, vol. 108(449), pages 1149-1161, July.
    11. Anne Krueger, 1995. "American Trade Policy: A Tragedy in the Making," Books, American Enterprise Institute, number 53526, September.
    12. Alan V. Deardorff, 2011. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 24, pages 267-293, World Scientific Publishing Co. Pte. Ltd..
    13. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    14. Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pablo Guerrero & Krista Lucenti & Sebastián Galarza S., 2009. "Trade Logistic and Regional Integration in Latin America & the Caribbean," IDB Publications (Working Papers) 9331, Inter-American Development Bank.
    2. Guillermo Perry, 2013. "Regional Public Goods in Finance, Trade and Infrastructure," Documentos CEDE 11888, Universidad de los Andes, Facultad de Economía, CEDE.
    3. Pablo Guerrero & Krista Lucenti & Sebastián Galarza, 2010. "Trade Logistics and Regional Integration in Latin America and the Caribbean," ADBI Working Papers 233, Asian Development Bank Institute.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antoni Estevadeordal & Brian Frantz & Alan M. Taylor, 2003. "The Rise and Fall of World Trade, 1870–1939," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(2), pages 359-407.
    2. Piermartini, Roberta & Teh, Robert, 2005. "Demystifying modelling methods for trade policy," WTO Discussion Papers 10, World Trade Organization (WTO), Economic Research and Statistics Division.
    3. Petra Bubáková, 2013. "Gravity Model of International Trade, Its Variables, Assumptions, Problems and Applications [Gravitační model mezinárodní směny, jeho proměnné, předpoklady, problémy a aplikace]," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2013(2), pages 3-24.
    4. Gabriel J Felbermayr & Wilhelm Kohler, 2014. "Exploring the Intensive and Extensive Margins of World Trade," World Scientific Book Chapters, in: European Economic Integration, WTO Membership, Immigration and Offshoring, chapter 4, pages 115-148, World Scientific Publishing Co. Pte. Ltd..
    5. Juan Felipe Mejía Mejía & Andr�s Ram�rez Hassan, 2013. "Solving the Puzzle: A New Measure of Trade Distance In The Gravity Equation," Documentos de Trabajo de Valor Público 11556, Universidad EAFIT.
    6. James Harrigan, 2001. "Specialization and the Volume of Trade: Do the Data Obey the Laws?," NBER Working Papers 8675, National Bureau of Economic Research, Inc.
    7. Paola Cardamone, 2007. "A Survey of the Assessments of the Effectiveness of Preferential Trade Agreements using Gravity Models," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 60(4), pages 421-473.
    8. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
    9. Jong‐Wha Lee & Innwon Park & Kwanho Shin, 2008. "Proliferating Regional Trade Arrangements: Why and Whither?," The World Economy, Wiley Blackwell, vol. 31(12), pages 1525-1557, December.
    10. Mauricio Cárdenas & Camilo Garc�a, 2005. "El modelo gravitacional y el TLC entre Colombia y Estados Unidos," Coyuntura Económica, Fedesarrollo.
    11. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
    12. Alemayehu Geda & Atnafu Meskel, 2008. "China and India's Growth Surge: Is it a curse or blessing for Africa? The Case of Manufactured Exports," African Development Review, African Development Bank, vol. 20(2), pages 247-272.
    13. Tiiu Paas & Egle Tafenau, 2004. "The Baltic Sea Region’s Role in Trade Integration," University of Tartu - Faculty of Economics and Business Administration, in: Modelling the Economies of the Baltic Sea Region, volume 17, chapter 3, pages 92-115, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    14. Christopher M. Meissner, 2003. "Exchange-Rate Regimes and International Trade: Evidence from the Classical Gold Standard Era," American Economic Review, American Economic Association, vol. 93(1), pages 344-353, March.
    15. Sergey Kolesnikov & Olga Podkorytova, 2011. "Russia's Trade Flows and WTO," DEGIT Conference Papers c016_068, DEGIT, Dynamics, Economic Growth, and International Trade.
    16. Stephen Redding & Anthony Venables, 2004. "Geography and Export Performance: External Market Access and Internal Supply Capacity," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 95-127, National Bureau of Economic Research, Inc.
    17. Bhattacharyya Ranajoy & Banerjee, Tathagata, 2006. "Does the Gravity Model Explain India Direction of Trade? A Panel Data Approach," IIMA Working Papers WP2006-09-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    18. Oxana Babecká Kucharčuková & Jan Babecký & Martin Raiser, 2012. "Gravity Approach for Modelling International Trade in South-Eastern Europe and the Commonwealth of Independent States: The Role of Geography, Policy and Institutions," Open Economies Review, Springer, vol. 23(2), pages 277-301, April.
    19. Suresh Moktan, 2008. "Evaluating the Intra–regional Exports and Trade Creation and Trade Diversion Effects of Trade Agreements in SAARC Countries," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 9(2), pages 233-260, September.
    20. Céline CARRERE, 2003. "Revisiting the Effects of Regional Trading Agreements on trade flows with Proper Specification of the Gravity Model," Working Papers 200310, CERDI.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ioe:cuadec:v:46:y:2009:i:133:p:3-33. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jaime Casassus (email available below). General contact details of provider: https://edirc.repec.org/data/iepuccl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.