Reciprocal Trade Agreements in Gravity Models: A Meta-Analysis

TradeAG Working Paper No. 06/12

44 Pages Posted: 13 Dec 2006

See all articles by Maria Cipollina

Maria Cipollina

Università degli Studi del Molise

Luca Salvatici

Università Roma Tre - Dipartimento di Economia

Multiple version iconThere are 2 versions of this paper

Date Written: 2006

Abstract

Over the time a large number of reciprocal preferential trade agreements (RTAs) have been concluded among countries. Recently many studies have used gravity equations in order to estimate the effect of RTAs on trade flows between partners. These studies report very different estimates, since they differ greatly in data sets, sample sizes, and independent variables used in the analysis. So, what is the "true" impact of RTAs? This paper combines, explains, and summarizes a large number of results (1827 estimates included in 85 papers), using a meta-analysis (MA) approach. Notwithstanding quite an high variability, studies consistently find a positive RTAs impact on bilateral trade: the hypothesis that there is no effect of trade agreements on trade is easily and robustly rejected at standard significance levels. We provide pooled estimates, obtained from fixed and random effects models, of the increase in bilateral trade due to RTAs. Finally, information collected on each estimate allows us to test the sensitivity of the results to alternative specifications and differences in the control variables considered.

Keywords: Free Trade Agreements, Gravity equation, Meta-regression analysis, Publication bias

JEL Classification: C10, F10

Suggested Citation

Cipollina, Maria and Salvatici, Luca, Reciprocal Trade Agreements in Gravity Models: A Meta-Analysis (2006). TradeAG Working Paper No. 06/12. Available at SSRN: https://ssrn.com/abstract=950929 or http://dx.doi.org/10.2139/ssrn.950929

Maria Cipollina

Università degli Studi del Molise ( email )

Via De Sanctis
I-86100 Campobasso, Campobasso (CB) 86100
Italy

Luca Salvatici (Contact Author)

Università Roma Tre - Dipartimento di Economia ( email )

Via Ostiense, 159
Roma, RM 00145
Italy
+390657335737 (Phone)

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