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The Trade and Investment Effects of Preferential Trading Arrangements - Old and New Evidence

Staff working paper

This paper by Richard Adams, Philippa Dee, Jyothi Gali and Greg McGuire, was released in July 2003.

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Cover, Copyright, Contents, Acknowledgments, Abbreviations, Summary

1   Introduction
1.1   First wave
1.2   Second wave
1.3   Third wave
1.4   Outline of this paper

2   A review of the theory of PTAs
2.1   The static welfare effects of PTAs
2.2   The dynamic effects of PTAs on multilateral liberalisation
2.3   The effects of non-trade provisions of PTAs
2.4   Summary

3   Review of the existing empirical evidence
3.1   Approaches to assessing PTAs
3.2   Evidence on trade creation and diversion effects of PTAs — assessment of first wave issues
3.3   Evidence on stumbling or building blocks — assessment of second wave issues
3.4   Evidence on investment creation and diversion effects of PTAs — assessment of third wave issues
3.5   Summary

4   New evidence on trade creation and diversion
4.1   Analytical issues
4.2   Model specification
4.3   Main results
4.4   Puzzles on new evidence
4.5   Summary

5   Investment creation and diversion
5.1   ‘New age’ or third wave provisions in PTAs
5.2   Model specification and estimation
5.3   Impact of merchandise trade and ‘new age’ provisions on investment
5.4   Summary

6   Summing up
6.1   Trade provisions
6.2   Non-trade provisions

A   Member Liberalisation Index

B   Data sources

C   Econometric estimation and issues

D   Econometric results