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Preferential trade agreements and manufactured goods exports: does it matter whom you PTA with?

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This article explores two questions. First, do preferential trade agreements (PTAs) affect manufactured goods exports of developing countries? Second, does it matter for developing countries whom they sign the PTAs with? We find that the answer to both questions is yes. Using bilateral manufactured goods exports data from 28 developing countries during 1978–2005; we find that South–South PTAs have a significantly positive effect on manufactured goods exports. In contrast, no such effect is detected in the case of South–North PTAs. We confirmed the robustness of these findings to estimation methodology, sample selection, time period, zero trade flows and multilateral trade resistance.
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Keywords: F13; F14; F15; L60; O14; O24; developing countries; gravity equation; industrial development; manufactured goods exports; preferential trade agreements; south–south and south–north trade

Document Type: Research Article

Affiliations: 1: Hampshire College, School of Critical Social Inquiry, Amherst, MA 01002, USA, 2: Department of Economics, University of Oklahoma, 436 Cate Center I, 308 Cate Center Drive, Norman, OK 73019, USA

Publication date: 2013-12-01

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