Table 1.
Open in new tab

Estimates of the Effects of DTAs on Trade

 (1)(2)(3)(4)(5)(6)(7)
 PTACONTDTAINVPROVWTO-XWTO+
|$\mathrm{PTA}_{ij,t}$|0.0890.050|$-$|0.076|$-$|0.133|$-$|0.093|$-$|0.094|$-$|0.090
 (0.058)(0.055)(0.056)(0.056)|$^{*}$|(0.051)|$^{+}$|(0.053)|$^{+}$|(0.050)|$^{+}$|
|$\mathrm{DTA}_{ij,t}$|––0.1390.1040.0050.0250.012
   (0.025)|$^{**}$|(0.026)|$^{**}$|(0.058)(0.055)(0.055)
|$\mathrm{INV}_{ij,t}$|–––0.137–––
    (0.052)|$^{**}$|   
|$\mathrm{DEPTH}_{ij,t}$|––––0.001––
     (0.000)|$^{**}$|  
|$\mathrm{WTO}$|-|$X_{ij,t}$|–––––0.001–
      (0.001)|$^{*}$| 
|$\mathrm{WTO}+_{ij,t}$|––––––0.001
       (0.000)|$^{**}$|
|$\mathrm{WTO}_{ij,t}$|–0.4130.4230.4290.4360.4350.434
  (0.041)|$^{**}$|(0.041)|$^{**}$|(0.040)|$^{**}$|(0.039)|$^{**}$|(0.039)|$^{**}$|(0.039)|$^{**}$|
|$\mathrm{BIT}_{ij,t}$|–0.1720.1600.1660.1650.1640.166
  (0.031)|$^{**}$|(0.031)|$^{**}$|(0.031)|$^{**}$|(0.031)|$^{**}$|(0.030)|$^{**}$|(0.031)|$^{**}$|
|$\mathrm{SANCT}_{ij,t}$|–0.0220.0200.0140.0140.0170.014
  (0.019)(0.018)(0.018)(0.017)(0.018)(0.017)
N161,425161,425161,425161,425161,425161,425161,425
 (1)(2)(3)(4)(5)(6)(7)
 PTACONTDTAINVPROVWTO-XWTO+
|$\mathrm{PTA}_{ij,t}$|0.0890.050|$-$|0.076|$-$|0.133|$-$|0.093|$-$|0.094|$-$|0.090
 (0.058)(0.055)(0.056)(0.056)|$^{*}$|(0.051)|$^{+}$|(0.053)|$^{+}$|(0.050)|$^{+}$|
|$\mathrm{DTA}_{ij,t}$|––0.1390.1040.0050.0250.012
   (0.025)|$^{**}$|(0.026)|$^{**}$|(0.058)(0.055)(0.055)
|$\mathrm{INV}_{ij,t}$|–––0.137–––
    (0.052)|$^{**}$|   
|$\mathrm{DEPTH}_{ij,t}$|––––0.001––
     (0.000)|$^{**}$|  
|$\mathrm{WTO}$|-|$X_{ij,t}$|–––––0.001–
      (0.001)|$^{*}$| 
|$\mathrm{WTO}+_{ij,t}$|––––––0.001
       (0.000)|$^{**}$|
|$\mathrm{WTO}_{ij,t}$|–0.4130.4230.4290.4360.4350.434
  (0.041)|$^{**}$|(0.041)|$^{**}$|(0.040)|$^{**}$|(0.039)|$^{**}$|(0.039)|$^{**}$|(0.039)|$^{**}$|
|$\mathrm{BIT}_{ij,t}$|–0.1720.1600.1660.1650.1640.166
  (0.031)|$^{**}$|(0.031)|$^{**}$|(0.031)|$^{**}$|(0.031)|$^{**}$|(0.030)|$^{**}$|(0.031)|$^{**}$|
|$\mathrm{SANCT}_{ij,t}$|–0.0220.0200.0140.0140.0170.014
  (0.019)(0.018)(0.018)(0.017)(0.018)(0.017)
N161,425161,425161,425161,425161,425161,425161,425

Source: Own calculations.

Note: This table reports estimates of the effects of trade agreements on trade flows over the period 1990–2011. The dependent variable is nominal trade flows. The estimator is the Poisson pseudo-maximum-likelihood (PPML) estimator. All estimates are obtained with three-way fixed effects, including exporter-time, importer-time, and directional pair fixed effects. In addition, all specifications include a full set of time-varying border variables. The estimates of the border dummies and all fixed effects, including the constant, are omitted for brevity. The standard errors in all specifications are clustered by country pair. Columns (1) and (2) report the average preferential trade agreement (PTA) effect across all agreements in the sample without and with controls (controls are World Trade Organization (WTO) membership (WTO), bilateral investment treaties (BIT), and economic sanctions (SANCT)). Column (3) adds the effects of deep trade agreements (DTAs). Column (4) distinguishes DTAs with investment provisions (INV). In addition to PTAs and DTAs, column (5) introduces a continuous variable for DTA depth (DEPTH). Finally, the last two columns define depth by distinguishing between WTO-X/WTO+ provisions, respectively. |$^{+}$||$p\lt 0.10$|⁠, |$^{*}$||$p\lt .05$|⁠, |$^{**}$||$p\lt .01$|⁠.

Table 1.
Open in new tab

Estimates of the Effects of DTAs on Trade

 (1)(2)(3)(4)(5)(6)(7)
 PTACONTDTAINVPROVWTO-XWTO+
|$\mathrm{PTA}_{ij,t}$|0.0890.050|$-$|0.076|$-$|0.133|$-$|0.093|$-$|0.094|$-$|0.090
 (0.058)(0.055)(0.056)(0.056)|$^{*}$|(0.051)|$^{+}$|(0.053)|$^{+}$|(0.050)|$^{+}$|
|$\mathrm{DTA}_{ij,t}$|––0.1390.1040.0050.0250.012
   (0.025)|$^{**}$|(0.026)|$^{**}$|(0.058)(0.055)(0.055)
|$\mathrm{INV}_{ij,t}$|–––0.137–––
    (0.052)|$^{**}$|   
|$\mathrm{DEPTH}_{ij,t}$|––––0.001––
     (0.000)|$^{**}$|  
|$\mathrm{WTO}$|-|$X_{ij,t}$|–––––0.001–
      (0.001)|$^{*}$| 
|$\mathrm{WTO}+_{ij,t}$|––––––0.001
       (0.000)|$^{**}$|
|$\mathrm{WTO}_{ij,t}$|–0.4130.4230.4290.4360.4350.434
  (0.041)|$^{**}$|(0.041)|$^{**}$|(0.040)|$^{**}$|(0.039)|$^{**}$|(0.039)|$^{**}$|(0.039)|$^{**}$|
|$\mathrm{BIT}_{ij,t}$|–0.1720.1600.1660.1650.1640.166
  (0.031)|$^{**}$|(0.031)|$^{**}$|(0.031)|$^{**}$|(0.031)|$^{**}$|(0.030)|$^{**}$|(0.031)|$^{**}$|
|$\mathrm{SANCT}_{ij,t}$|–0.0220.0200.0140.0140.0170.014
  (0.019)(0.018)(0.018)(0.017)(0.018)(0.017)
N161,425161,425161,425161,425161,425161,425161,425
 (1)(2)(3)(4)(5)(6)(7)
 PTACONTDTAINVPROVWTO-XWTO+
|$\mathrm{PTA}_{ij,t}$|0.0890.050|$-$|0.076|$-$|0.133|$-$|0.093|$-$|0.094|$-$|0.090
 (0.058)(0.055)(0.056)(0.056)|$^{*}$|(0.051)|$^{+}$|(0.053)|$^{+}$|(0.050)|$^{+}$|
|$\mathrm{DTA}_{ij,t}$|––0.1390.1040.0050.0250.012
   (0.025)|$^{**}$|(0.026)|$^{**}$|(0.058)(0.055)(0.055)
|$\mathrm{INV}_{ij,t}$|–––0.137–––
    (0.052)|$^{**}$|   
|$\mathrm{DEPTH}_{ij,t}$|––––0.001––
     (0.000)|$^{**}$|  
|$\mathrm{WTO}$|-|$X_{ij,t}$|–––––0.001–
      (0.001)|$^{*}$| 
|$\mathrm{WTO}+_{ij,t}$|––––––0.001
       (0.000)|$^{**}$|
|$\mathrm{WTO}_{ij,t}$|–0.4130.4230.4290.4360.4350.434
  (0.041)|$^{**}$|(0.041)|$^{**}$|(0.040)|$^{**}$|(0.039)|$^{**}$|(0.039)|$^{**}$|(0.039)|$^{**}$|
|$\mathrm{BIT}_{ij,t}$|–0.1720.1600.1660.1650.1640.166
  (0.031)|$^{**}$|(0.031)|$^{**}$|(0.031)|$^{**}$|(0.031)|$^{**}$|(0.030)|$^{**}$|(0.031)|$^{**}$|
|$\mathrm{SANCT}_{ij,t}$|–0.0220.0200.0140.0140.0170.014
  (0.019)(0.018)(0.018)(0.017)(0.018)(0.017)
N161,425161,425161,425161,425161,425161,425161,425

Source: Own calculations.

Note: This table reports estimates of the effects of trade agreements on trade flows over the period 1990–2011. The dependent variable is nominal trade flows. The estimator is the Poisson pseudo-maximum-likelihood (PPML) estimator. All estimates are obtained with three-way fixed effects, including exporter-time, importer-time, and directional pair fixed effects. In addition, all specifications include a full set of time-varying border variables. The estimates of the border dummies and all fixed effects, including the constant, are omitted for brevity. The standard errors in all specifications are clustered by country pair. Columns (1) and (2) report the average preferential trade agreement (PTA) effect across all agreements in the sample without and with controls (controls are World Trade Organization (WTO) membership (WTO), bilateral investment treaties (BIT), and economic sanctions (SANCT)). Column (3) adds the effects of deep trade agreements (DTAs). Column (4) distinguishes DTAs with investment provisions (INV). In addition to PTAs and DTAs, column (5) introduces a continuous variable for DTA depth (DEPTH). Finally, the last two columns define depth by distinguishing between WTO-X/WTO+ provisions, respectively. |$^{+}$||$p\lt 0.10$|⁠, |$^{*}$||$p\lt .05$|⁠, |$^{**}$||$p\lt .01$|⁠.

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