Are All Trade Agreements Equal? : The Role of Distance in Shaping the Effect of Economic Integration Agreements on Trade Flows

How does geographic distance affect the impact of trade agreements on bilateral exports, and through what channels? This paper examines this questions in a gravity model context for different types of goods for 185 countries over the period 1965-20...

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Main Authors:	Freeman, Rebecca, Pienknagura, Samuel
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2016
Subjects:	trade agreements regional integration geography economic distance gravity model spatial economics
Online Access:	http://documents.worldbank.org/curated/en/2016/08/26741306/all-trade-agreements-equal-role-distance-shaping-effect-economic-integration-agreements-trade-flows http://hdl.handle.net/10986/25054

id	okr-10986-25054
recordtype	oai_dc
spelling	okr-10986-250542021-04-23T14:04:28Z Are All Trade Agreements Equal? : The Role of Distance in Shaping the Effect of Economic Integration Agreements on Trade Flows Freeman, Rebecca Pienknagura, Samuel trade agreements regional integration geography economic distance gravity model spatial economics How does geographic distance affect the impact of trade agreements on bilateral exports, and through what channels? This paper examines this questions in a gravity model context for different types of goods for 185 countries over the period 1965-2010. Three stylized facts emerge. First, although economic integration agreements have a positive impact on trade flows, geographic distance significantly decreases their effect. Second, this phenomenon is in large part explained by the impact of economic integration agreements on distance-sensitive goods, in particular intermediates. These results hold when controlling for trade agreement depth, measured by the type of agreement and content of provisions, and economic similarity among trading partners. Third, this paper finds either no significant effect or a positive interaction between distance and economic integration agreements for final goods, suggesting that trade agreements among countries located far from each other help consumption patterns shift toward the most efficient producers. 2016-09-12T22:42:29Z 2016-09-12T22:42:29Z 2016-08 Working Paper http://documents.worldbank.org/curated/en/2016/08/26741306/all-trade-agreements-equal-role-distance-shaping-effect-economic-integration-agreements-trade-flows http://hdl.handle.net/10986/25054 English en_US Policy Research Working Paper;No. 7809 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	trade agreements regional integration geography economic distance gravity model spatial economics
spellingShingle	trade agreements regional integration geography economic distance gravity model spatial economics Freeman, Rebecca Pienknagura, Samuel Are All Trade Agreements Equal? : The Role of Distance in Shaping the Effect of Economic Integration Agreements on Trade Flows
geographic_facet	Latin America & Caribbean
relation	Policy Research Working Paper;No. 7809
description	How does geographic distance affect the impact of trade agreements on bilateral exports, and through what channels? This paper examines this questions in a gravity model context for different types of goods for 185 countries over the period 1965-2010. Three stylized facts emerge. First, although economic integration agreements have a positive impact on trade flows, geographic distance significantly decreases their effect. Second, this phenomenon is in large part explained by the impact of economic integration agreements on distance-sensitive goods, in particular intermediates. These results hold when controlling for trade agreement depth, measured by the type of agreement and content of provisions, and economic similarity among trading partners. Third, this paper finds either no significant effect or a positive interaction between distance and economic integration agreements for final goods, suggesting that trade agreements among countries located far from each other help consumption patterns shift toward the most efficient producers.
format	Working Paper
author	Freeman, Rebecca Pienknagura, Samuel
author_facet	Freeman, Rebecca Pienknagura, Samuel
author_sort	Freeman, Rebecca
title	Are All Trade Agreements Equal? : The Role of Distance in Shaping the Effect of Economic Integration Agreements on Trade Flows
title_short	Are All Trade Agreements Equal? : The Role of Distance in Shaping the Effect of Economic Integration Agreements on Trade Flows
title_full	Are All Trade Agreements Equal? : The Role of Distance in Shaping the Effect of Economic Integration Agreements on Trade Flows
title_fullStr	Are All Trade Agreements Equal? : The Role of Distance in Shaping the Effect of Economic Integration Agreements on Trade Flows
title_full_unstemmed	Are All Trade Agreements Equal? : The Role of Distance in Shaping the Effect of Economic Integration Agreements on Trade Flows
title_sort	are all trade agreements equal? : the role of distance in shaping the effect of economic integration agreements on trade flows
publisher	World Bank, Washington, DC
publishDate	2016
url	http://documents.worldbank.org/curated/en/2016/08/26741306/all-trade-agreements-equal-role-distance-shaping-effect-economic-integration-agreements-trade-flows http://hdl.handle.net/10986/25054
_version_	1764458257144872960

Are All Trade Agreements Equal? : The Role of Distance in Shaping the Effect of Economic Integration Agreements on Trade Flows

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