Are Trade Preferences More Effective than Aid in Supporting Exports? Evidence from the ‘Everything But Arms’ Preference Scheme

26 Pages Posted: 8 Aug 2016

See all articles by Katerina Gradeva

Katerina Gradeva

Goethe University Frankfurt

Inmaculada Martínez-Zarzoso

University of Goettingen (Göttingen) - School of Law, Economics, Social Sciences; Jaume I University - Department of Economics

Date Written: August 2016

Abstract

This study examines the effect of the ‘Everything But Arms’ (EBA) trade preferences regime on exports from the African, Caribbean and Pacific countries (ACP) to the European Union (EU). With this aim, an augmented gravity model is estimated for exports from the 79 ACP countries to the EU‐15 for the time period of 1995—2013 using panel data techniques. The results are used to quantify the effect of the eligibility for EBA preferences on the export performance of the ACP least developed countries (LDCs) and to relate it to the impact of official development assistance on exports. In addition to their separate effects, the combined impact of EBA and aid flows is examined. The main results do not provide evidence for an additional positive effect of the EBA agreement on the export performance of the ACP LDCs. However, receiving aid shows a significant and positive effect on exports from EBA‐eligible ACP countries to the EU‐15, supporting an EU development strategy that includes both sorts of assistance, aid and trade preferences.

Suggested Citation

Gradeva, Katerina and Martínez-Zarzoso, Inmaculada, Are Trade Preferences More Effective than Aid in Supporting Exports? Evidence from the ‘Everything But Arms’ Preference Scheme (August 2016). The World Economy, Vol. 39, Issue 8, pp. 1146-1171, 2016, Available at SSRN: https://ssrn.com/abstract=2819234 or http://dx.doi.org/10.1111/twec.12289

Katerina Gradeva (Contact Author)

Goethe University Frankfurt

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

Inmaculada Martínez-Zarzoso

University of Goettingen (Göttingen) - School of Law, Economics, Social Sciences ( email )

Germany

Jaume I University - Department of Economics ( email )

Campus del Riu Sec.
E-12071 Castellon
Spain

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1
Abstract Views
274
PlumX Metrics