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Trade Blocks and the Gravity Model: Evidence from Latin American Countries

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  • Carrillo-Tudela, C
  • Li, CA

Abstract

We apply the gravity model to examine the effects of the Andean Community and Mercosur on both intra-regional and intra-industrial trade in the period 1980-1997. After accounting for size and distance effects, the Andean Community preferential trade agreements had a significant effect on both the differentiated and reference products, in particular capital intensive goods. In contrast, Mercosur preferential trade agreements only had a positive effect on the capital intensive subcategory of the reference products.

Suggested Citation

  • Carrillo-Tudela, C & Li, CA, 2002. "Trade Blocks and the Gravity Model: Evidence from Latin American Countries," Economics Discussion Papers 2731, University of Essex, Department of Economics.
    • Handle: RePEc:esx:essedp:2731
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    More about this item

    Keywords

    F14 F15; gravity model; bilateral trade; trade blocks; Andean Community and Mercosur;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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