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Economic Integration Agreements and Extensive Margin of Export: An Empirical Study of India

Author

Listed:
  • Nivedita Mullick

    (Indian Institute of Foreign Trade, New Delhi,India)

  • Areej A. Siddiqui

    (Indian Institute of Foreign Trade, New Delhi,India)

Abstract

Changes in trade costs are an intended consequence of formation & participation in Economic Integration Agreements (EIAs). This paper attempts to examine the ex-post effects (owing to the reduced trade costs) of the agreements that India has been a part of, on the extensive margin of export. Additionally, the present study examines if deeper agreements impact extensive export margin by a greater degree than shallower agreements. The time period spanning from 2012 to 2018 used for our study, together with the trading country pairs makes for a panel dataset which helps in accounting for unobserved heterogeneity. Inclusion of separate dummy for economic integration agreements of varying depth, allows for heterogeneity across EIAs and inclusion of fixed effects in our gravity model framework helps to account for the factors that would have otherwise been neglected. The results of our study show that One-way Preferential Trade Agreement, Two-way Preferential Trade Agreement & Free Trade Agreement, all have significant impact on the extensive export margin with deeper agreements (Free Trade Agreements and Two-Way Preferential Trade Agreement) having a larger impact than the shallower agreements (One-Way Preferential Trade Agreement).

Suggested Citation

  • Nivedita Mullick & Areej A. Siddiqui, 2021. "Economic Integration Agreements and Extensive Margin of Export: An Empirical Study of India," Working Papers 2155, Indian Institute of Foreign Trade.
    • Handle: RePEc:ift:wpaper:2155
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    More about this item

    Keywords

    Economic Integration Agreements; Trade Margins; Gravity Model;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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