Quantile gravity : economic integration agreements, least traded goods, and less developed economies

dc.contributor.authorBergstrand, Jeffrey H.
dc.contributor.authorClance, Matthew W.
dc.contributor.emailmatthew.clance@up.ac.za
dc.date.accessioned2025-10-02T08:37:44Z
dc.date.available2025-10-02T08:37:44Z
dc.date.issued2025-09
dc.descriptionDATA AVAILABILITY STATEMENT : The data that support the findings of this study are available from the corresponding author upon reasonable request.
dc.description.abstractGravity-equation estimates of the elasticity of trade with respect to bilateral trade costs – or of coefficient estimates of binary variables for the presence or absence of economic integration agreements (EIAs) – are central to determining quantitatively economic welfare impacts of trade-policy liberalizations. Despite decades of study, trade economists have largely focused on conditional mean estimates of a (constant) trade elasticity or of an EIA dummy variable's (common) effect in a “gravity-equation” specification. In this paper, we provide a novel panel-data quantile regression approach to estimating EIAs' partial effects across (conditional) quantiles that avoids Jensen's Inequality, avoids the incidental parameters problem associated with three-way fixed effects, and allows zeros. To motivate the potential economic usefulness of our approach, we examine two distinct “cases.” First, using quantile regressions across a broad swath of country-pairs and EIAs at the disaggregated trade-flow level, we provide systematic evidence that supports the Arkolakis (2010) proposition; trade-flow growth effects of any type of EIA are larger for goods with lower initial sales. Second, we show that the partial effects of EIAs on trade flows are considerably larger for developing countries' exporters across quantiles.
dc.description.departmentEconomics
dc.description.librarianhj2025
dc.description.sdgSDG-08: Decent work and economic growth
dc.description.sdgSDG-17: Partnerships for the goals
dc.description.sponsorshipThe University of Pretoria.
dc.description.urihttps://onlinelibrary.wiley.com/journal/14679396
dc.identifier.citationBergstrand, J.H. & Clance, M.W. 2025, 'Quantile gravity : economic integration agreements, least traded goods, and less developed economies', Review of International Economics, vol. 33, no. 4, pp. 951-987, doi : 10.1111/roie.12814.
dc.identifier.issn0965-7576 (print)
dc.identifier.issn1467-9396 (online)
dc.identifier.other10.1111/roie.12814
dc.identifier.urihttp://hdl.handle.net/2263/104581
dc.language.isoen
dc.publisherWiley
dc.rights© 2025 The Author(s). Review of International Economics published by John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License.
dc.subjectQuantile regressions
dc.subjectEconomic integration agreements (EIAs)
dc.subjectGravity equation
dc.subjectInternational trade
dc.titleQuantile gravity : economic integration agreements, least traded goods, and less developed economies
dc.typeArticle

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