NDLI: Preference erosion and the developing countries exports to the EU: a dynamic panel gravity approach

Content Provider	Springer Nature Link
Author	Raimondi, Valentina Scoppola, Margherita Olper, Alessandro
Copyright Year	2012
Abstract	The erosion of preferences due to multilateral tariff reductions is a long-standing concern for many developing countries. This paper focuses on the erosion of the preferences granted by the EU in the rice industry. Since 2004 there has been a sharp decrease in border protection for the EU rice industry. Because the EU grants trade preferences to a considerable number of rice exporting developing countries, the reform implied preference erosion as well. By addressing the impact of preference erosion on developing countries rice exports to the EU, this paper contributes two original insights to the literature: first, by proposing a new empirical approach to compute the preference margin when tariff rate quotas are in force which is based on the assumption of the existence of fixed costs and economies of scale in international trade; second, by estimating the trade elasticities of preferences by means of a dynamic panel gravity equation to deal with the issues of endogeneity of preferences and persistency in bilateral trade flows. The results show that the way preference margins are calculated matters significantly when assessing the existence and extent of their erosion and the values of trade elasticities. Finally, the estimations highlight the fact that the impact of preferences is still very strong for some of the countries concerned.
Starting Page	707
Ending Page	732
Page Count	26
File Format	PDF
ISSN	16102878
Journal	Weltwirtschaftliches Archiv
Volume Number	148
Issue Number	4
e-ISSN	16102886
Language	English
Publisher	Springer-Verlag
Publisher Date	2012-07-20
Publisher Place	Berlin, Heidelberg
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Trade preferences Gravity equation Tariff rate quotas EU rice policy GMM Economic Policy Macroeconomics/Monetary Economics International Economics Financial Economics European Integration
Content Type	Text
Resource Type	Article
Subject	Economics, Econometrics and Finance

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