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The impact of preferences on developing countries’ exports to the European Union: bilateral gravity modelling at the product level

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posted on 2023-06-08, 21:37 authored by Francesca Foliano, Xavier Cirera, Michael GasiorekMichael Gasiorek
Unilateral preferences aim at increasing exports from developing countries via reductions on applied tariffs and the incentives created by the preference margin. After decades of existence the evidence as to the extent to which preferential schemes have been genuinely effective in increasing exports is mixed. This paper evaluates the impact of the European Union’s (EU) unilateral preferential regimes on the exports of developing countries using a bilateral gravity model at the product level. We use a unique dataset that allows us to determine the actual tariff rate paid by each export flow at the product level (Combined Nomenclature CN-10 digits) to the EU and the preferential regime of entry. This allows us to accurately specify the impact of each trade regime and to properly address the issue of utilisation and non-utilisation of trade preferences. The most important findings of the paper are that unilateral preferences have been effective in increasing exports to the EU both as a result of the direct effect of lower tariffs and positive preference margin, and because of secondary effects associated with the preference regimes; although the outcome of these secondary effects depends on the margin of trade considered.

History

Publication status

  • Published

File Version

  • Accepted version

Journal

Empirical Economics

ISSN

0377-7332

Publisher

Springer Verlag

Issue

1

Volume

50

Page range

59-102

Department affiliated with

  • Economics Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2015-07-14

First Open Access (FOA) Date

2016-11-07

First Compliant Deposit (FCD) Date

2015-07-14

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