The impact of preferential trade agreements on bilateral trade: A structural gravity model analysis.
Trade agreements are thought to raise trade integration, but existing preferential trade agreements (PTAs) are insufficient in measuring market access of products. This study develops a product-based coverage index of PTAs using the World Trade Organization (WTO) preferential trade agreements and ca...
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| Format: | Article |
| Language: | English |
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Public Library of Science (PLoS)
2021-01-01
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| Series: | PLoS ONE |
| Online Access: | https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0249118&type=printable |
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| author | Xing Yao Yongzhong Zhang Rizwana Yasmeen Zhen Cai |
| author_facet | Xing Yao Yongzhong Zhang Rizwana Yasmeen Zhen Cai |
| author_sort | Xing Yao |
| collection | DOAJ |
| description | Trade agreements are thought to raise trade integration, but existing preferential trade agreements (PTAs) are insufficient in measuring market access of products. This study develops a product-based coverage index of PTAs using the World Trade Organization (WTO) preferential trade agreements and calculates bilateral trade measures using the EORA multi-regional input-output (MRIO) tables covering 189 countries worldwide over the period 1990-2015; the structural gravity model is employed to test how PTAs affect bilateral trade. Our findings show that countries sharing a common PTA could boost the trade volume compared to those without PTAs, supporting the trade creation effect. However, the trade promotion effect of the product-based coverage index of PTAs is significant only if the member countries are low-and middle-income countries. Further, the wide range of product liberalization brought by PTAs can promote global production networks by stimulating the trade of intermediate goods. Our results are important for understanding the market access effect of PTAs with the increasing development of trade integration and global value chains (GVCs). |
| format | Article |
| id | doaj-art-0b3a5907dbc1414ea2411bf9f1d4a5d3 |
| institution | DOAJ |
| issn | 1932-6203 |
| language | English |
| publishDate | 2021-01-01 |
| publisher | Public Library of Science (PLoS) |
| record_format | Article |
| series | PLoS ONE |
| spelling | doaj-art-0b3a5907dbc1414ea2411bf9f1d4a5d32025-08-20T02:55:30ZengPublic Library of Science (PLoS)PLoS ONE1932-62032021-01-01163e024911810.1371/journal.pone.0249118The impact of preferential trade agreements on bilateral trade: A structural gravity model analysis.Xing YaoYongzhong ZhangRizwana YasmeenZhen CaiTrade agreements are thought to raise trade integration, but existing preferential trade agreements (PTAs) are insufficient in measuring market access of products. This study develops a product-based coverage index of PTAs using the World Trade Organization (WTO) preferential trade agreements and calculates bilateral trade measures using the EORA multi-regional input-output (MRIO) tables covering 189 countries worldwide over the period 1990-2015; the structural gravity model is employed to test how PTAs affect bilateral trade. Our findings show that countries sharing a common PTA could boost the trade volume compared to those without PTAs, supporting the trade creation effect. However, the trade promotion effect of the product-based coverage index of PTAs is significant only if the member countries are low-and middle-income countries. Further, the wide range of product liberalization brought by PTAs can promote global production networks by stimulating the trade of intermediate goods. Our results are important for understanding the market access effect of PTAs with the increasing development of trade integration and global value chains (GVCs).https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0249118&type=printable |
| spellingShingle | Xing Yao Yongzhong Zhang Rizwana Yasmeen Zhen Cai The impact of preferential trade agreements on bilateral trade: A structural gravity model analysis. PLoS ONE |
| title | The impact of preferential trade agreements on bilateral trade: A structural gravity model analysis. |
| title_full | The impact of preferential trade agreements on bilateral trade: A structural gravity model analysis. |
| title_fullStr | The impact of preferential trade agreements on bilateral trade: A structural gravity model analysis. |
| title_full_unstemmed | The impact of preferential trade agreements on bilateral trade: A structural gravity model analysis. |
| title_short | The impact of preferential trade agreements on bilateral trade: A structural gravity model analysis. |
| title_sort | impact of preferential trade agreements on bilateral trade a structural gravity model analysis |
| url | https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0249118&type=printable |
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