Does economic integration increase trade margins? Empirical evidence from LAIAs countries

Abstract

This paper studies the effects of economic integration in Latin America on the margins of trade. The analysis is performed on bilateral exports of goods from eleven member countries of the Latin American Integration Association (LAIA) over the period 1962- 2009. We distinguish the effects of different levels of integration on trade margins; different “timing” and different sectors. Our results provide evidence about the benefits of regional integration. Despite appearing to have contributed most to boosting exports of goods that were already exported rather than to diversification, regional trade integration is in line with LAIA members’ development and industrialization objectives.