A Panel Data Analysis of Size Classification and the Effects of Preferential Trade Agreements

  • Snorri Thomas Snorrason
Part of the Contributions to Economics book series (CE)


This chapter investigates the effects of PTAs on trade flows in the E45 using panel data analysis for the years 1990 to 2005. This is undertaken with respect to the differential impact on E45 countries according to the size classification introduced in Chap. 3.

The first section provides an overview of the Common Constant Method, Fixed and Random Effect approaches to panel data analysis. Section 6.6 undertakes a panel data analysis of the impact of the size of countries, using the classification developed in Chap. 3, to analyse the trade flow effects on E45 countries. Section 6.7 investigates the impact of PTAs on the trade flows of the same E45 countries. The final panel data estimation in Sect. 6.8 investigates the trade flow effects of the size of countries and PTAs simultaneously. Section 6.9 investigates the welfare effects of PTAs and trade costs according to the country size classification and membership of a trade bloc. The analysis estimates the standard trade creation and trade diversion effects as well as consideration of the implications for countries according to their size using the classification developed in Chap. 3. Section 6.10 presents a brief summary and conclusions.


Size Classification Trade Cost Trade Flow Small Country Panel Data Analysis 
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Copyright information

© Springer-Verlag Berlin Heidelberg 2012

Authors and Affiliations

  • Snorri Thomas Snorrason
    • 1
  1. 1.Management School Department of EconomicsLancaster UniversityLancasterUK

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