@article{Bensassi:331930,
      recid = {331930},
      author = {Bensassi, Sami and Márquez-Ramos, Laura and  Martínez-Zarzoso, Inmaculada},
      title = {Economic Integration and the two margins of trade: An  application to the Euro-Mediterranean agreements},
      address = {2010},
      pages = {38},
      year = {2010},
      note = {Presented at the 13th Annual Conference on Global Economic  Analysis, Penang, Malaysia},
      abstract = {According to trade theory, preferential trade agreements  increase international trade through a reduction in  artificial trade barriers. In recently developed models  with imperfect competition and heterogeneous firms, lower  trade costs increase bilateral trade through an increase of  the number of exporting firms (the extensive margin of  trade) and a rise in the mean value of individual shipments  (the intensive margin of trade). In these models, the  influence of trade costs on bilateral trade results from a  combination of three parameters, which affect both margins:  the distance elasticity of transportation costs, the price  elasticity and the degree of firm heterogeneity. In this  paper, a decomposition of a structural gravity equation  derived from Chaney’s (2008) model is presented. Using  highly disaggregated export data for seven countries  (Algeria, Egypt, Jordan, Lebanon, Morocco, Syria and  Tunisia) between 1995 and 2008, we estimate the impact of  the recently signed trade agreements with the EU on both  trade margins and we provide empirical evidence of the  validity of the theoretical predictions.},
      url = {http://ageconsearch.umn.edu/record/331930},
}