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Do unilateral trade preferences help export diversification? An investigation of the impact of European unilateral trade preferences on the extensive and intensive margin of trade

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Author Info
Elisa Gamberoni () (IUHEI, The Graduate Institute of International Studies, Geneva)

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Abstract

We analyze the impact of the EU unilateral trade preferences on both the intensive and the extensive margin of trade. Using a tobit and probit estimation we find that the impact of unilateral trade preferences on both margins is strictly linked to the sector under analysis and to the type of preferences a country benefits from. In particular, we find an anti-diversification effect along with a concentration of exports in agricultural products in the case of more stable preferential schemes, as represented by the African Caribbean and Pacific trade preferences. We also confirm that the Generalized System of Preferences (GSP) for least developing countries did not change the beneficiaries' export pattern, while the traditional GSP and the regime to combat drug production tend to promote diversification of exports.

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Paper provided by Economics Section, The Graduate Institute of International Studies in its series HEI Working Papers with number 17-2007.

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Handle: RePEc:gii:giihei:heiwp17-2007

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Related research
Keywords: Extensive margin; Melitz model; Generalized System of Preference.;

Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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  1. Richard Baldwin Virginia Di Nino, 2006. "Euros and zeros: The common currency effect on trade in new goods," HEI Working Papers heiwp21-2006, Economics Section, The Graduate Institute of International Studies, revised 31 Oct 2006. [Downloadable!]
    Other versions:
  2. Hoekman, Bernard, 2004. "Dismantling Discrimination Against Developing Countries: Access, Rules and Differential Treatment," CEPR Discussion Papers 4694, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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    Other versions:
  4. Arvind Subramanian & Shang-Jin Wei, 2003. "The WTO Promotes Trade, Strongly But Unevenly," NBER Working Papers 10024, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Hoekman, Bernard & Ozden, Caglar, 2005. "Trade preferences and differential treatment of developing countries : a selective survey," Policy Research Working Paper Series 3566, The World Bank. [Downloadable!]
  6. Richard E. Baldwin & Rikard Forslid, 2006. "Trade Liberalization with Heterogenous Firms," NBER Working Papers 12192, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Andrew K. Rose, 2004. "Do We Really Know That the WTO Increases Trade?," American Economic Review, American Economic Association, vol. 94(1), pages 98-114, March. [Downloadable!]
    Other versions:
  8. Alberto Amurgo Pacheco, 2006. "Preferential Trade Liberalization and the Range of Exported Products: The Case of the Euro-Mediterranean FTA," HEI Working Papers 18-2006, Economics Section, The Graduate Institute of International Studies. [Downloadable!]
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  14. repec:rus:hseeco:123558 is not listed on IDEAS
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