Review of World Economics

, Volume 147, Issue 3, pp 385–409 | Cite as

Preferential trade agreements and the structure of international trade

Original Paper

Abstract

In this paper we examine the impact of membership in preferential trade agreements (PTAs) on trade between PTA members. Rather than considering the impact of PTA membership on the volume of trade we consider the impact of membership on the structure of trade. For a large sample of countries over the period 1962–2000 we find that membership in a PTA is associated with an increase in the extent of intra-industry trade. Our results indicate that this is especially the case for PTAs formed between richer countries, with the effects of PTAs between poorer countries found to be smaller.

Keywords

Preferential trade agreements Intra-industry trade Gravity equation 

JEL Classification

F10 F15 

Notes

Acknowledgments

The present paper was prepared as part of the EU FP7 programme project ‘World Input–Output Database: Construction and Applications’ (WIOD). This project is funded by the European Commission, Research Directorate General as part of the Seventh Framework Programme, Theme 8: Socio-Economic Sciences and Humanities. Grant Agreement no. 225 281. The authors would like to thank two anonymous referees and the editor for valuable comments.

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Copyright information

© Kiel Institute 2011

Authors and Affiliations

  1. 1.The Vienna Institute for International Economic Studies—wiiwViennaAustria

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