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Revisiting Regional Trading Agreements with Proper Specification of the Gravity Model
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Revisiting Regional Trading Agreements with Proper Specification of the Gravity Model

Author

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  • Céline CARRERE

    (Centre d'Etudes et de Recherches sur le Développement International)

Abstract

This paper uses a gravity model to assess ex-post regional trade agreements. The model includes 130 countries and is estimated in panel over the period 1962-96. 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 the explanatory variables and the bilateral specific effects introduced in the model, as well as potential selection bias. In contrast with previous estimates, results show that over the period 1962-1996, regional agreements have generated a significant increase in trade between members, often at the expense of the rest of the world.

Suggested Citation

  • Céline CARRERE, 2002. "Revisiting Regional Trading Agreements with Proper Specification of the Gravity Model," Working Papers 200210, CERDI.
    • Handle: RePEc:cdi:wpaper:857
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    Cited by:

    1. Jean-François Brun & Céline Carrère & Patrick Guillaumont & Jaime de Melo, 2015. "Has Distance Died? Evidence from a Panel Gravity Model," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 13, pages 299-320, World Scientific Publishing Co. Pte. Ltd..
    2. Afesorgbor, Sylvanus Kwaku & van Bergeijk, Peter A.G., 2011. "Multi-membership and effectiveness of regional trade agreements in Western and Southern Africa: a comparative study of ECOWAS and SADC," Proceedings of the German Development Economics Conference, Berlin 2011 1, Verein für Socialpolitik, Research Committee Development Economics.

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