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Revisiting the Effects of Regional Trade Agreements on Trade Flows with Proper Specification of the Gravity Model

Abstract : This paper uses a gravity model to assess ex-post regional trade agreements. The model includes 130 countries and is estimated with panel data over the period 1962-1996. The introduction of the correct number of dummy variables allows for identification of Vinerian trade creation and trade diversion effects, while the estimation method takes into account a potential correlation between some of the explanatory variables and the bilateral specific effects introduced in the model, as well as a potential selection bias. In contrast to previous estimates in cross-section, results show that regional agreements have generated a significant increase in trade between members, often at the expense of the rest of the world.
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https://hal.archives-ouvertes.fr/hal-00020429
Contributor : Agnès Carcenac Connect in order to contact the contributor
Submitted on : Friday, March 10, 2006 - 9:52:33 AM
Last modification on : Tuesday, April 20, 2021 - 10:48:06 AM

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  • HAL Id : hal-00020429, version 1

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Céline Carrere. Revisiting the Effects of Regional Trade Agreements on Trade Flows with Proper Specification of the Gravity Model. European Economic Review, Elsevier, 2006, 50, pp.223-247. ⟨hal-00020429⟩

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