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The Impact of EU Trade Preferences on the Extensive and Intensive Agricultural and Food Product Margins

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  • Scoppola, M.
  • Raimondi, V.
  • Olper, A.

Abstract

In this paper we study the trade creation effects of the EU preferential trade agreements (PTAs) in the agriculture and food sectors for a large sample of developing countries in the period 1990-2006. We build upon the existing literature on trade with heterogeneous firms, by investigating the extent to which the effects of PTAs occurs mainly through the extensive – number of exported products – or the intensive – volume of existing products – margins. A direct measure of export diversification based on the theoreticallyfounded decomposition of trade into the two margins is here used. Empirically, we use a gravity framework in a panel data setting, and different estimators to deal with the issues of zero trade flows and of the presence of an upper bound in the dependent variable, which has been recently shown to raise new problems in the most common gravity econometric approaches. Main results show that the EU PTAs positively affect the agricultural extensive margins, especially through other than tariff provisions linked with the PTA, while in the food industry results are more sensitive to the estimator used. As far as concern the intensive margin, the PTAs effect is only driven by the role of tariff, while other provisions of the PTAs do not exert any relevant impact in both agricultural and food products.

Suggested Citation

  • Scoppola, M. & Raimondi, V. & Olper, A., 2013. "The Impact of EU Trade Preferences on the Extensive and Intensive Agricultural and Food Product Margins," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151145, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:151145
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    File URL: http://purl.umn.edu/151145
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    References listed on IDEAS

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    Cited by:

    1. Curzi, Daniele & Raimondi, Valentina & Olper, Alessandro, 2013. "Quality Upgrading, Competition and Trade Policy: Evidence from the Agri-Food Sector," Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152387, International Agricultural Trade Research Consortium.
    2. Nicita, Alessandro & Rollo, Valentina, 2015. "Market Access Conditions and Sub-Saharan Africa’s Exports Diversification," World Development, Elsevier, vol. 68(C), pages 254-263.

    More about this item

    Keywords

    Gravity equation; trade preferences; extensive mergin; Demand and Price Analysis; International Relations/Trade; F13; Q17; F14;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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