Journal
AGRICULTURAL ECONOMICS
Volume 49, Issue 2, Pages 251-263Publisher
WILEY
DOI: 10.1111/agec.12413
Keywords
F13; Q17; F14; Extensive; intensive margins; Gravity equation; EU trade preferences; Developing countries
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In this article, we study the trade creation effects of EU preferential trade agreements (PTAs) in the agriculture and food sectors for a large sample of developing countries in the period 1990-2006. We investigate the extent to which the PTAs affect trade through the extensive marginnumber of exported productsor the intensive marginvolume of existing products. We use a gravity framework in a panel data setting, and different estimators to deal with the issues of zero trade flows and the presence of an upper bound in the dependent variable. The results show that EU PTAs positively affect the extensive margin in agricultural trade, but not in processed foods. As regards the intensive margin, the effect is driven by the role of tariffs alone, whereas the other provisions of PTAs do not exert any other significant impact on agricultural or food products.
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