IDEAS home Printed from https://ideas.repec.org/p/sus/susewp/2711.html
   My bibliography  Save this paper

The impact of GSP Preferences on Developing Countries' Exports in the European Union: Bilateral Gravity Modelling at the Product Level

Author

Listed:
  • Xavier Cirera

    (IDS and CARIS, University of Sussex)

  • Francesca Foliano

    (Institute of Education, University College London)

  • Michael Gasiorek

    (Department of Economics and CARIS, University of Sussex)

Abstract

Unilateral preferences aim at increasing exports from developing countries via reductions on applied tariffs and the incentives created by the preference margin. After decades of existence of these schemes, an important policy question is whether preferential schemes have been effective in increasing exports. This paper evaluates empirically the impact of the European Union (EU) GSP preferential regimes on exports from developing countries using a bilateral gravity model at the product level. Rather than using dummy variables to proxy each trade regime as in most empirical papers, this paper uses a unique dataset at CN-10 digits that allows us to determine the tariff rate paid by each export to the EU and the preferential regime of entry and address the issue of utilisation and nonutilisation of trade preferences, which can result in wrong attribution of causality between trade regimes and export flows. The most important finding of the paper is the fact that the results critically depend on (i) how the advantage provided by the preferences measure is measured, and (ii) whether the extensive margin of trade is included. Overall the results suggest preferences have a very small impact on trade, and negligible or even negative when we consider the scope for trade diversification. Therefore, it appears that the GSP system has provided a small effect on increasing exports at the intensive margin, but no effect on export diversification.

Suggested Citation

  • Xavier Cirera & Francesca Foliano & Michael Gasiorek, 2011. "The impact of GSP Preferences on Developing Countries' Exports in the European Union: Bilateral Gravity Modelling at the Product Level," Working Paper Series 2711, Department of Economics, University of Sussex.
  • Handle: RePEc:sus:susewp:2711
    as

    Download full text from publisher

    File URL: http://www.sussex.ac.uk/economics/documents/wps27-2011-cirera.pdf
    Download Restriction: no

    Citations

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


    Cited by:

    1. Sharma, Anupa & Grant, Jason & Boys, Kathryn, 2015. "Truly Preferential Treatment? Reconsidering the Generalized System of (Trade) Preferences," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205890, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    2. Emiliano Magrini & Pierluigi Montalbano & Silvia Nenci, 2013. "Are the EU trade preferences really effective? A Generalized Propensity Score evaluation of the Southern Mediterranean Countries' case in agriculture and fishery," Working Papers 2/13, Sapienza University of Rome, DISS.
    3. Maria Cipollina & David Laborde Debucquet & Luca Salvatici, 2017. "The tide that does not raise all boats: an assessment of EU preferential trade policies," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(1), pages 199-231, February.
    4. Emiliano Magrini & Pierluigi Montalbano & Silvia Nenci, 2013. "Are the EU trade preferences really effective? A Generalized Propensity Score evaluation of the Southern Mediterranean Countries' case in agriculture and fishery," Working Papers 2/13, Sapienza University of Rome, DISS.
    5. Cipollina, Maria & Laborde, David & Salvatici, Luca, 2013. "Do Preferential Trade Policies (Actually) Increase Exports? An analysis of EU trade policies," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150177, Agricultural and Applied Economics Association.
    6. Ronald B. Davies & Rodolphe Desbordes, 2016. "The Impact of Everything But Arms on EU Relative Labour Demand," Working Papers 201614, School of Economics, University College Dublin.

    More about this item

    Keywords

    preferential trade arrangements; GSP; gravity models; preference utilisation;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements

    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:sus:susewp:2711. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Russell Eke) or (Rebekah McClure). General contact details of provider: http://edirc.repec.org/data/ecsusuk.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.