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This study surveys the empirical literature in which the gravity equation has been used to study the effect of economic integration agreements (EIAs) on international trade flows. We show that most studies either focus on improving the methodology to assess regionalism's overall impact, or on a small set of well-known agreements without necessarily adopting new methodological improvements. We bridge this gap by providing individual estimates for EIAs on world trade, while employing first-differencing techniques to correct for endogeneity bias and account for phase-in effects. Overall, EIAs promote trade by at most 50 %. Surprisingly, more than half of the EIAs investigated have had no discernible impact on trade at all, while only about one quarter of the agreements are trade promoting. Characteristics of these agreements, such as their institutional quality, design, and their members' involvement in the World Trade Organisation, shed more light on how this variation can be understood.

Food security is a global concern affecting even highly developed countries. Ongoing globalisation of food systems, characterised by trading interdependencies, means that agricultural production can be disrupted by climate change, affecting food availability. This study investigated Sweden’s food security by identifying major food import categories and associated trade partners (using the World Integrated Trade System database) and vulnerability to frictions in trade deriving from climate change. Vulnerability was assessed through three indicators: exposure based on diversity of sources, dominance and direct trade from supplying countries; sensitivity, assessed using the Climate Risk Index, and adaptive capacity, assessed using the Fragile State Index. The results revealed that Sweden’s grain imports may be most vulnerable, and animal products least vulnerable, to climate change. Management strategies based on this preliminary assessment can be developed by integrating climate vulnerability deriving from food trading into the ‘Gravity’ model, to improve prediction of trade flows.

One of the most relevant features in the context of international trade in recent decades is the increase in the depth of trade agreements. The aim of this article is to explore the heterogeneous effect of preferential trade agreements (PTAs) on bilateral trade flows including their depth in addition to other agreement characteristics such as the geographical scope of the member countries, their degree of development, or their nature. To measure depth, we follow the most recent works that propose indirect instead of direct measures. Once we control for depth, our results reveal that (i) the positive effect of regional PTAs is notably larger for deep agreements whereas the shallow interregional agreements do not seem to increase bilateral trade flows; (ii) North–North PTAs only boost trade when they exhibit a high depth level; and (iii) the depth is not a relevant factor for plurilateral agreements and those that consist of the adhesion of a country to an existent PTA.

This study anticipates changes in U.S. highway and rail trade patterns following widespread availability of self-driving or autonomous trucks (Atrucks). It uses a random-utility-based multiregional input–output model, driven by foreign export demands, to simulate changes in freight flows among 3109 U.S. counties and 117 export zones, via a nested-logit model for shipment or input origin and mode, including the shipper’s choice between autonomous trucks and conventional or human-driven trucks (Htrucks). Different value of travel time and cost scenarios are explored, to provide a sense of variation in the uncertain future of ground-based trade flows. Using the current U.S. Freight Analysis Framework (FAF4) data for travel times and costs—and assuming that Atrucks lower trucking costs by 25% (per ton-mile delivered), truck flow values in ton-miles are predicted to rise 11%, due to automation’s lowering of trucking costs, while rail flow values fall 4.8%. Rail flows are predicted to rise 6.6% for trip distances between 1000 and 1500 miles, with truck volumes rising for all other distance bands. Introduction of Atrucks favors longer truck trades, but rail’s low price remains competitive for trade distances over 3000 miles. Htrucks continue to dominate in shorter-distance freight movements, while Atrucks dominate at distances over 500 miles. Eleven and twelve commodity sectors see an increase in trucking’s domestic flows and export flows, respectively. And total ton-miles across all 13 commodity groups rise slightly by 3.1%, as automation lowers overall shipping costs.

This study examines the relative impacts of transport and information and communications technology (ICT) components of trade-related infrastructure on bilateral trade flows between Nigeria and its major trading partners. An augmented standard gravity model that featured variables for the transport infrastructure component and the ICT component was estimated using bilateral trade data on 22 major trading partners of Nigeria for the period 2005–2021. The panel instrumental variables technique, precisely pooled two-stage least squares technique leveraged on fixed and random effects models, was used for the analysis. The findings show that the two components of trade-related infrastructure, transportation and information and communication technology (ICT) have a significant impact on trade flows between Nigeria and its trading partners. In the exports model, the differential impact of the transport infrastructure component is higher than the ICT component, but the differential impact of the ICT component is greater in the imports model. This suggests that the efficient provision of both transport and ICT infrastructure facilitates trade, while the inefficient provision of either or both hinders it. Therefore, greater attention must be placed on improving both components.

The gravity model is a statistical tool widely used for cross-country empirical analysis of international trade flows. Throwing light on the current perspective of Indias trade potential with the RCEP (Regional Comprehensive Economic Partnership) countries has been a major contributor to conducting the current study. The neighbouring country effect was taken as a factor separately rather than the distance to understand the effect of the neighbouring country dummy variable on the trade potential. It was found that when we consider the clustering by distance, the Regional Trade Agreement does not affect trade. Certain factors like Distance, Capita Income, and Border and Per Capita Income influence bilateral trade between the two countries. However, the Regional Trade Agreement does not look to be an influential variable for enhancing the bilateral trade between both countries. It was concluded that the bilateral trade does not involve much influence from the Regional Trade Agreement Treaty, and its effect is more ornamental than actual.

The main aim of the study was to assess the impact of Economic Partnership Agreement (EPA) and Southern African Development Community Free Trade Area (SADC-FTA) on Zimbabwe's agricultural trade flows. Results highlight that Zimbabwe's membership in EPA initiated in 2012, enhanced the country's agricultural trade flows by 307.96%. Membership in SADC-FTA initiated in 2008 has enhanced the country's agricultural trade flows by 437.09%. Other independent variables including exchange rates and GDP negatively impacted the country's agricultural trade flows. From the empirical findings, it is critical for the government to conduct impact assessments.

Abstract The international trade of Pakistan is highly concentrated on a few goods and markets. This study investigates macroeconomic behaviour of trade flow and explores potential trade markets for Pakistan using an augmented gravity model on a large panel of 47 cross-sections from 1980 to 2013. The result of standard gravity variables shows consistent findings with statistically significant t-statistics, whereas augmented variables reveal that relative price has a positive impact with lower price elasticity. The result of binary variables shows that Pakistan’s trade is more with countries having the same language, whereas lower trade is observed with bordering countries. The result of South Asian Free Trade Agreement (SAFTA) revealed ineffectiveness of regional integration on the creation of trade for Pakistan, whereas, bilateral free trade agreements (BFTAs) have created considerable trade. The finding of trade potential revealed exhausted potential with major trading partners and there is a need for greater trade diversification from exhausted to potential countries. It has higher untapped potential with Nepal, Iraq, India, Philippines and Jordan, respectively, in Asia, whereas European countries have the highest potential. The results concluded that Pakistan can diversify its trade from exhausted to potential countries through individual BFTAs and multilateral free trade agreements. South Asian countries should address their disputes and revisit SAFTA aiming to improve regional trade and growth.

The aim of this article is to assess the impact of the European Union's trade preferences on bilateral trade flows. Using highly disaggregated 8-digit import data in a theoretically grounded gravity model framework, we define an explicit measure of preferential tariff margins and use that to estimate sector-specific elasticities. From the methodological point of view, we show that the assessment of these policies' impacts is very sensitive to the definition of the preferential tariff margin. An important by-product of our procedures is that they can be used to obtain estimates of trade elasticities of substitution, some of the most important parameters in the international trade empirical literature. Results show that actual preferential schemes or possible future policies, such as the transatlantic trade agreement between the USA and the EU (TTIP), have a significant impact on trade volumes, with large differences across sectors.