This paper analyses the impact of Free Trade Agreements (FTAs) on Middle East and North African Countries (MENA) trade for the period 1994-2010. The analysis distinguishes between industrial and agricultural trade separately to take into account the different liberalisation schedules. An augmented gravity model is estimated using up-to-date panel data techniques to control for all time-invariant bilateral factors that influence bilateral trade as well as for the so-called multilateral resistance. We also control for the endogeneity of the agreements and test for self-selection bias due to the presence of zero trade in our sample. The main findings indicate that both North-South- FTAs and South-South-FTAs have a similar impact in terms of increasing trade in MENA countries showing greater global market integration. We conclude that FTAs that include agricultural products, in which MENA countries have a clear comparative advantage, are more desirable for these countries than those only including industrial products.
Author: | Maria-Dolores; Inmaculada, Parra; Martínez-Zazoso |
Volume: | 2014.03 |
Publisher: | INFER |
Year: | 2014 |
No. of pages: | 31 |
Category: |