Preferential Trade Agreements and Manufactured Goods Exports: Does It Matter Whom You PTA With?

Demir, Firat and Dahi, Omar S. (2012): Preferential Trade Agreements and Manufactured Goods Exports: Does It Matter Whom You PTA With?

Abstract

This paper explores two questions. First, can Preferential Trade Agreements (PTAs) affect industrial development in developing countries? Second, does it matter for developing countries whom they sign the PTAs with? We find that the answer to both questions is yes. Using bilateral manufactured goods exports data from 28 developing countries during 1978-2005, we find that South-South PTAs have a significantly positive effect on manufactured goods exports. In contrast, no such effect is detected in the case of South-North PTAs. We confirmed the robustness of these findings to estimation methodology, sample selection, time period, zero trade flows, and multilateral trade resistance.

• Item Type: MPRA Paper
• Language: English
• Keywords: Manufactured goods exports; Preferential Trade Agreements; South-South and South-North trade; Gravity equation; Industrial development; Developing countries
• Subjects: F - International Economics > F1 - Trade > F15 - Economic Integration; F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy ; Factor Movement Policy ; Foreign Exchange Policy; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General

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