A Cross-Section Analysis of Size Classification and the Effects of Preferential Trade Agreements
This chapter applies econometric methods to cross section data to capture the inter-temporal changes in trade flows due to the impact of PTAs with considerations to the size classification established in Chap. 3. Section 5.1 displays the econometric specification of the cross-sectional gravity model and discusses its characteristics. In Sect. 5.2 trade flow effects are investigated, by estimating the effects of selected PTAs on imports and exports of the E45 region for the years 1990, 1995, 2000 and 2005. Section 5.3 undertakes a cross-sectional analysis according to the size classifications established in Chap. 3. Sections 5.5 and 5.6 estimate the trade effects of the EU and CISFTA, with applications to size of countries. Section 5.7 presents a summary and conclusions.
KeywordsSize Classification Trade Flow Small Country Income Elasticity Large Country
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