A sensitivity analysis on the impact of regional trade agreements in bilateral trade flows

Abstract: We estimate the effect of RTAs on bilateral exports by means of a gravity model analyzing its sensitivity to different specifications and methods. RTAs generate a sizable positive effect. However, shifting to country-pair and time-varying fixed effects systematically reduces coefficients....

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Autores principales:	Ahcar-Olmos,Jaime, Rodríguez-Barco,David
Lenguaje:	English
Publicado:	Universidad de Chile. Departamento de Economía 2020
Materias:	International Trade Trade Liberalization Regional Trade Agreements RTA Gravity Model Economic Integration
Acceso en línea:	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862020000200193
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spelling	oai:scielo:S0718-528620200002001932020-12-28A sensitivity analysis on the impact of regional trade agreements in bilateral trade flowsAhcar-Olmos,JaimeRodríguez-Barco,David International Trade Trade Liberalization Regional Trade Agreements RTA Gravity Model Economic Integration Abstract: We estimate the effect of RTAs on bilateral exports by means of a gravity model analyzing its sensitivity to different specifications and methods. RTAs generate a sizable positive effect. However, shifting to country-pair and time-varying fixed effects systematically reduces coefficients. Nevertheless, the RTA effect is consistent across methods and specifications. The RTA effect attributable to particular trade agreements displays high variability. While most RTAs increase trade, others present non-significant or negative results. We apply robustness checks to individual RTA estimates by presenting PPML time-invariant fixed effects and next to these, country-pair and time-varying fixed effects estimates. Thus, 38.2% of RTAs are positive and significant in both specifications. RTAs trade creation effects tend to prevail over trade diversion effects.info:eu-repo/semantics/openAccessUniversidad de Chile. Departamento de EconomíaEstudios de economía v.47 n.2 20202020-12-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862020000200193en10.4067/S0718-52862020000200193
institution	Scielo Chile
collection	Scielo Chile
language	English
topic	International Trade Trade Liberalization Regional Trade Agreements RTA Gravity Model Economic Integration
spellingShingle	International Trade Trade Liberalization Regional Trade Agreements RTA Gravity Model Economic Integration Ahcar-Olmos,Jaime Rodríguez-Barco,David A sensitivity analysis on the impact of regional trade agreements in bilateral trade flows
description	Abstract: We estimate the effect of RTAs on bilateral exports by means of a gravity model analyzing its sensitivity to different specifications and methods. RTAs generate a sizable positive effect. However, shifting to country-pair and time-varying fixed effects systematically reduces coefficients. Nevertheless, the RTA effect is consistent across methods and specifications. The RTA effect attributable to particular trade agreements displays high variability. While most RTAs increase trade, others present non-significant or negative results. We apply robustness checks to individual RTA estimates by presenting PPML time-invariant fixed effects and next to these, country-pair and time-varying fixed effects estimates. Thus, 38.2% of RTAs are positive and significant in both specifications. RTAs trade creation effects tend to prevail over trade diversion effects.
author	Ahcar-Olmos,Jaime Rodríguez-Barco,David
author_facet	Ahcar-Olmos,Jaime Rodríguez-Barco,David
author_sort	Ahcar-Olmos,Jaime
title	A sensitivity analysis on the impact of regional trade agreements in bilateral trade flows
title_short	A sensitivity analysis on the impact of regional trade agreements in bilateral trade flows
title_full	A sensitivity analysis on the impact of regional trade agreements in bilateral trade flows
title_fullStr	A sensitivity analysis on the impact of regional trade agreements in bilateral trade flows
title_full_unstemmed	A sensitivity analysis on the impact of regional trade agreements in bilateral trade flows
title_sort	sensitivity analysis on the impact of regional trade agreements in bilateral trade flows
publisher	Universidad de Chile. Departamento de Economía
publishDate	2020
url	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862020000200193
work_keys_str_mv	AT ahcarolmosjaime asensitivityanalysisontheimpactofregionaltradeagreementsinbilateraltradeflows AT rodriguezbarcodavid asensitivityanalysisontheimpactofregionaltradeagreementsinbilateraltradeflows AT ahcarolmosjaime sensitivityanalysisontheimpactofregionaltradeagreementsinbilateraltradeflows AT rodriguezbarcodavid sensitivityanalysisontheimpactofregionaltradeagreementsinbilateraltradeflows
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A sensitivity analysis on the impact of regional trade agreements in bilateral trade flows

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