Do Trade Agreements Stimulate International Trade Differently? Evidence from 296 Trade Agreements

51 Pages Posted: 6 Jun 2013

See all articles by Tristan Kohl

Tristan Kohl

University of Groningen - Faculty of Economics and Business

Steven Brakman

University of Groningen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Harry Garretsen

Utrecht University - School of Economics; CESifo (Center for Economic Studies and Ifo Institute); Radboud University Nijmegen - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 31, 2013

Abstract

In a seminal paper, Rose (2004) found that the assumed positive impact of the WTO on international trade was questionable. This finding has been scrutinized and modified in subsequent research, using different datasets, econometric methods and separating the WTO from other forms of trade agreements. A key characteristic of this literature is the rather simplistic way in which trade agreements are treated whereby all trade agreements are lumped together. Trade agreements come, however, in many different forms and shapes. This paper addresses these differences in trade agreements. Using a unique database of 296 trade agreements, we distinguish 17 trade-related policy domains, 9 indicators of institutional quality and indicate whether the agreements contain legally enforceable commitments. This extensive and novel taxonomy of trade agreements enables us to allow for the possible heterogeneity of the impact of trade agreements on international trade. Using a gravity model, we find that trade agreement heterogeneity indeed matters for international trade, both positively and negatively.

Keywords: trade agreements, gravity model, international trade

JEL Classification: F130, F150

Suggested Citation

Kohl, Tristan and Brakman, Steven and Garretsen, Harry, Do Trade Agreements Stimulate International Trade Differently? Evidence from 296 Trade Agreements (May 31, 2013). CESifo Working Paper Series No. 4243. Available at SSRN: https://ssrn.com/abstract=2274605

Tristan Kohl (Contact Author)

University of Groningen - Faculty of Economics and Business ( email )

P.O. Box 800
Groningen, Groningen 9700 AV
Netherlands

HOME PAGE: http://www.tristankohl.org

Steven Brakman

University of Groningen - Department of Economics ( email )

P.O. Box 800
9700 AV Groningen
Netherlands
+31 50 363 3746 (Phone)
+31 50 363 3730 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Harry Garretsen

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, 3584 EC
Netherlands
+31 0 30 253 9810 (Phone)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.cesifo.de

Radboud University Nijmegen - Department of Economics ( email )

Nijmegen, 6500 HK
Netherlands
+31 24 361 5889 (Phone)
+31 24 361 1846 (Fax)

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