Evaluating the impact of non-reciprocal trade preferences using gravity models

Abstract

This paper presents new evidence on the impact of non-reciprocal preferential trade policies (NRPTPs) granted by developed countries to exports from developing countries over the period 1995-2003. The analysis has been carried out by using three levels of data aggregation. It accounts for unobservable heterogeneity, endogeneity of the preferential treatment, and potential selection bias. We find a positive and significant impact of NRPTPs when considering total exports and total agricultural exports. However, at 2-digit agricultural level the results are heterogeneous.