The Trade Effects of Endogenous Preferential Trade Agreements

Peter Egger, Mario Larch, Kevin Staub and Rainer Winkelmann

No 1013, SOI - Working Papers from Socioeconomic Institute - University of Zurich

Abstract: Recent work by Anderson and van Wincoop (2003) establishes an empirical modeling strategy which takes full account of the structural, non-(log-)linear impact of trade barriers on trade in new trade theory models. Structural new trade theory models have never been used to evaluate and quantify the role of endogenous preferential trade agreement (PTA) membership for trade in a way which is consistent with general equilibrium. Apart from this gap, the present paper aims at delivering an empirical model which takes into account both that preferential trade agreement membership is endogenous and that the world matrix of bilateral trade flows contains numerous zero entries. These features are treated in an encompassing way by means of (possibly two-part) Poisson pseudo-maximum likelihood estimation with endogenous binary indicator variables in the empirical model.

Keywords: Gravity model; Endogenous preferential trade agreement membership; Poisson pseudo-maximum likelihood estimation with endogenous binary indicator variables (search for similar items in EconPapers)
JEL-codes: F14 F15 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2010-11
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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https://www.zora.uzh.ch/id/eprint/51795/1/wp1013.pdf first version, 2010 (application/pdf)

Related works:
Journal Article: The Trade Effects of Endogenous Preferential Trade Agreements (2011)
Working Paper: The Trade Effects of Endogenous Preferential Trade Agreements (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:soz:wpaper:1013

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