Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7394420 | World Development | 2015 | 15 Pages |
Abstract
This paper examines how dissimilarity of partner country characteristics affects the change in trade flows under a preferential trade agreement (PTA). Our results show that the more similar the partner countries are, the larger the increase in intra-bloc trade is under a PTA. Particularly, there is a substantial “development neighborhood premium”: the gain for developing countries from a PTA among themselves is about two and a half times that from partnering with industrial countries. Our findings challenge the perception that by becoming more integrated with industrial countries, developing countries could automatically gain access to a much larger and lucrative export market.
Related Topics
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Economics and Econometrics
Authors
Juyoung Cheong, Do Won Kwak, Kam Ki Tang,