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The impact of EU trade preferences on the extensive and intensive margins of agricultural and food products
Author(s) -
Scoppola Margherita,
Raimondi Valentina,
Olper Alessandro
Publication year - 2018
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/agec.12413
Subject(s) - margin (machine learning) , agriculture , economics , international economics , international trade , gravity model of trade , panel data , sample (material) , variable (mathematics) , bilateral trade , agricultural economics , econometrics , geography , chemistry , mathematical analysis , mathematics , archaeology , chromatography , machine learning , computer science , china
In this article, we study the trade creation effects of EU preferential trade agreements (PTAs) in the agriculture and food sectors for a large sample of developing countries in the period 1990–2006. We investigate the extent to which the PTAs affect trade through the extensive margin—number of exported products—or the intensive margin—volume of existing products. We use a gravity framework in a panel data setting, and different estimators to deal with the issues of zero trade flows and the presence of an upper bound in the dependent variable. The results show that EU PTAs positively affect the extensive margin in agricultural trade, but not in processed foods. As regards the intensive margin, the effect is driven by the role of tariffs alone, whereas the other provisions of PTAs do not exert any other significant impact on agricultural or food products.