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Evaluating the impact of nonreciprocal trade preferences using gravity models

Author

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  • Francesco Aiello
  • Paola Cardamone
  • Maria Rosaria Agostino

Abstract

This article presents new evidence on the impact of Nonreciprocal Preferential Trade Policies (NRPTPs) granted by developed countries to exports from developing countries over the period 1995 to 2003. The analysis has been carried out by using three levels of data aggregation. It accounts for unobservable heterogeneity, endogeneity of the preferential treatment and potential selection bias. We find a positive and significant impact of NRPTPs when considering total exports and total agricultural exports. However, at 2-digit agricultural level the results are heterogeneous.

Suggested Citation

  • Francesco Aiello & Paola Cardamone & Maria Rosaria Agostino, 2010. "Evaluating the impact of nonreciprocal trade preferences using gravity models," Applied Economics, Taylor & Francis Journals, vol. 42(29), pages 3745-3760.
  • Handle: RePEc:taf:applec:v:42:y:2010:i:29:p:3745-3760
    DOI: 10.1080/00036840802314614
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    References listed on IDEAS

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    1. Richard Baldwin & Daria Taglioni, 2006. "Gravity for Dummies and Dummies for Gravity Equations," NBER Working Papers 12516, National Bureau of Economic Research, Inc.
    2. Daniel Lederman & Çaglar Özden, 2004. "U.S. Trade Preferences: All are not Created Equal," Working Papers Central Bank of Chile 280, Central Bank of Chile.
    3. Martin, Will & Pham, Cong S., 2008. "Estimating the gravity model when zero trade flows are frequent," Working Papers eco_2008_03, Deakin University, Department of Economics.
    4. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    5. Deardoff, A.V., 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," Working Papers 382, Research Seminar in International Economics, University of Michigan.
    6. repec:fth:michin:382 is not listed on IDEAS
    7. Piermartini, Roberta & Teh, Robert, 2005. "Demystifying modelling methods for trade policy," WTO Discussion Papers 10, World Trade Organization (WTO), Economic Research and Statistics Division.
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    Citations

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    Cited by:

    1. Sylvanus Kwaku Afesorgbor & Kaleb Girma Abreha, 2015. "Preferential Market Access, Foreign Aid and Economic Development," Economics Working Papers 2015-04, Department of Economics and Business Economics, Aarhus University.
    2. Xavier Cirera & Francesca Foliano & Michael Gasiorek, 2016. "The impact of preferences on developing countries’ exports to the European Union: bilateral gravity modelling at the product level," Empirical Economics, Springer, vol. 50(1), pages 59-102, February.
    3. Aiello, Francesco & Demaria, Federica, 2009. "Do trade preferential agreements enhance the exports of developing countries? Evidence from the EU GSP," MPRA Paper 20093, University Library of Munich, Germany.
    4. Petra Bubáková, 2013. "Gravity Model of International Trade, Its Variables, Assumptions, Problems and Applications," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2013(2), pages 3-24.
    5. Agostino, Mariarosaria & Trivieri, Francesco, 2014. "Geographical indication and wine exports. An empirical investigation considering the major European producers," Food Policy, Elsevier, vol. 46(C), pages 22-36.
    6. Fiankor, Dela-Dem Doe & Ehrich, Malte & Brümmer, Bernhard, 2016. "EU-African Regional Trade Agreements as a Development Tool to Reduce EU Border Rejections," Discussion Papers 244352, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    7. Cooke, Edgar F. A., 2012. "Is the impact of AGOA heterogeneous?," MPRA Paper 43277, University Library of Munich, Germany.

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