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Title: Asymmetric economic integration : size characteristics of economies, trade costs & economic welfare
Author: Snorrason, Snorri Thomas
Awarding Body: Lancaster University
Current Institution: Lancaster University
Date of Award: 2011
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Asymmetric economic integration refers to integration between partners of different sizes. This thesis asks the question: are the welfare implications of economic integration dependent on the size of economies? To assist in answering this question, the relationship between size and the characteristics of economies is examined and the relationship between trade costs and the size classification of economies is observed. Countries are classified by a size index that includes the app lied measures of size as well as a theoretical measure of sub-optimality. Relative trade costs are calculated for each size classification and the results are compared. Cross-section and panel data analyses of the welfare effects of PTAs for countries according to the size classifications are carried. An econometric gravity analysis is implemented to estimate the trade diversion and trade creation effects with respect to the size classification. The welfare effects of economic integration are calculated using a general equilibrium model where the calculations are again made according to size classification of countries. The conclusion is that ex post analysis of the effects of economic integration agreements is asymmetric between the size of nations and according to the size classification used in this study; small countries are the biggest gainers ex post from economic integration agreements. To estimate the effects of PTAs on trade flows, two econometric methods are used. A cross-section analysis is used to capture the temporal evaluation of the impact of PTAs on trade flows and a panel data analysis to capture the impact of PT As over a longer time period. Both of these methods are used to estimate tile effects of PTAs on tile country size classification. Tile findings confirm that the impact of PTAs on trade flows is asymmetric between countries of different sizes. The results indicate that the effects of PT As are lowest on the trade flows, imports and exports of large countries and the exports of micro countries. The effects of PTAs are greatest on the trade flows, imports and exports of small countries. Two general equilibrium models are constructed with different assumptions regarding market structure to estimate the effects of PTAs, ex ante, on welfare according to country's size classification. Tile results of the general equilibrium analysis are that the welfare gains are asymmetric between the sizes of countries; they further confirm that small countries are the largest relative gainers from economic integration, followed by medium-sized countries.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available