Understanding the Benefits of Regional Integration to Trade : The Application of a Gravity Model to the Case of Central America

Gordillo, Darwin Marcelo; Stokenberga, Aiga; Schwartz, Jordan

dc.creator	Gordillo, Darwin Marcelo
dc.creator	Stokenberga, Aiga
dc.creator	Schwartz, Jordan
dc.date	2012-03-19T18:43:27Z
dc.date	2012-03-19T18:43:27Z
dc.date	2010-12-01
dc.date.accessioned	2023-02-17T21:07:12Z
dc.date.available	2023-02-17T21:07:12Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101214085824
dc.identifier	http://hdl.handle.net/10986/3990
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244960
dc.description	The paper identifies the impact of physical barriers to trade within Central America through the use of an augmented and partially constrained Gravity Model of Trade. Adjusting the Euclidian distance factor for Central America by real average transport times, the model quantifies the impact of poor connectivity and border frictions on the region's internal trade as well as its trade with external partners, such as the United States and Europe. In addition, the authors benchmark Central America's trade coefficients against those of a physically integrated region by running a parallel Gravity Model for the 15 core countries of the European Union. This allows for the estimation of potential intra-regional and external trade levels if Central America were to reduce border frictions and time of travel between countries and thus benefit from both the adjacency of each country's neighbors and the gravitational pull of the region's economies. The analysis is conducted for all of Central America's trade and is also disaggregated for three groups of products -- processed fruits and vegetables; steel and steel products; and grains -- by both volume and value. This differentiation tests the consistency of the results while providing insight into the differentiation in trading patterns and potential for these containerized, break-bulk, and bulk products. The results of the model include a potential doubling in intraregional exports if Central America could achieve the adjacency and time-distance factors of a truly integrated region. In addition, the region's combined exports to the European Union and the United States are projected to increase by more than a third compared with the current level, assuming European Union-level adjacency performance. Even more external trade benefits would accrue by reducing the economic penalty imposed by overland transport and border crossing inefficiencies.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5506
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ADVERSE EFFECTS
dc.subject	AGRICULTURAL PRODUCTS
dc.subject	AGRICULTURE
dc.subject	AIR
dc.subject	ARTERIES
dc.subject	BANANAS
dc.subject	BARRIERS TO TRADE
dc.subject	BENCHMARK
dc.subject	BENCHMARKS
dc.subject	BENEFITS OF TRADE
dc.subject	BENEFITS OF TRADE FACILITATION
dc.subject	BEVERAGES
dc.subject	BILATERAL TRADE
dc.subject	BORDER CROSSING
dc.subject	BORDER CROSSINGS
dc.subject	BORDER TRADE
dc.subject	BOTTLENECKS
dc.subject	CA
dc.subject	CANE SUGAR
dc.subject	CASTINGS
dc.subject	CEREAL PRODUCTS
dc.subject	CIGARS
dc.subject	COMPARATIVE ADVANTAGE
dc.subject	COMPETITIVENESS
dc.subject	CONGESTION
dc.subject	CORN
dc.subject	CUSTOMS
dc.subject	CUSTOMS ADMINISTRATION
dc.subject	CUSTOMS CLEARANCE
dc.subject	CUSTOMS PROCEDURES
dc.subject	DEVELOPMENT POLICY
dc.subject	DRIVERS
dc.subject	ECONOMIC COOPERATION
dc.subject	ECONOMIC OUTLOOK
dc.subject	ECONOMIC POLICY
dc.subject	ECONOMIC RESEARCH
dc.subject	ECONOMICS
dc.subject	ELASTICITIES
dc.subject	ELASTICITY
dc.subject	EXOGENOUS VARIABLES
dc.subject	EXPORT BASKET
dc.subject	EXPORT BASKETS
dc.subject	EXPORT DIVERSIFICATION
dc.subject	EXPORT MARKETS
dc.subject	EXPORT PROCEDURES
dc.subject	EXPORT STRUCTURES
dc.subject	EXPORT VALUE
dc.subject	EXPORTERS
dc.subject	EXPORTS
dc.subject	EXTERNAL TRADE
dc.subject	FOOD EXPORTS
dc.subject	FOOD IMPORTS
dc.subject	FOOD PRICES
dc.subject	FOREIGN MARKETS
dc.subject	FREE TRADE
dc.subject	FREE TRADE AGREEMENT
dc.subject	FREE TRADE AGREEMENTS
dc.subject	FREE TRADE ZONES
dc.subject	FREIGHT
dc.subject	FRUIT
dc.subject	FRUITS
dc.subject	FUELS
dc.subject	GDP
dc.subject	GDP PER CAPITA
dc.subject	GRAINS
dc.subject	GRAVITY EQUATION
dc.subject	GRAVITY MODEL
dc.subject	GRAVITY MODELS
dc.subject	GROSS DOMESTIC PRODUCT
dc.subject	GROWTH RATE
dc.subject	HAZARD
dc.subject	IMPERFECT COMPETITION
dc.subject	IMPORT MARKETS
dc.subject	INTERNATIONAL TRADE
dc.subject	INTRAREGIONAL TRADE
dc.subject	MAIZE
dc.subject	MARKET SIZE
dc.subject	MARKET SIZE EFFECTS
dc.subject	METAL PRODUCTS
dc.subject	OPENNESS
dc.subject	OPTIMIZATION
dc.subject	PACKAGING
dc.subject	PALM OIL
dc.subject	PATTERNS OF TRADE
dc.subject	POSITIVE EFFECTS
dc.subject	PROCESSED FOODS
dc.subject	PRODUCTIVITY GROWTH
dc.subject	RAIL
dc.subject	RAIL SERVICES
dc.subject	RAILWAY
dc.subject	REGIONAL INTEGRATION
dc.subject	REGIONAL TRADE
dc.subject	REGIONAL TRADE INTEGRATION
dc.subject	RICE
dc.subject	ROAD
dc.subject	ROAD CONDITIONS
dc.subject	ROAD HAULAGE
dc.subject	ROAD QUALITY
dc.subject	ROADS
dc.subject	ROUTE
dc.subject	ROUTES
dc.subject	RUBBER
dc.subject	SEAFOOD
dc.subject	SPEEDS
dc.subject	STEEL
dc.subject	STEEL BARS
dc.subject	STEEL PRODUCTS
dc.subject	STRUCTURAL CHANGE
dc.subject	TARIFF BARRIERS
dc.subject	TECHNOLOGY TRANSFER
dc.subject	TRADE AGREEMENT
dc.subject	TRADE BARRIERS
dc.subject	TRADE DETERMINANTS
dc.subject	TRADE FACILITATION
dc.subject	TRADE FLOWS
dc.subject	TRADE IMPEDIMENTS
dc.subject	TRADE LIBERALIZATION
dc.subject	TRADE MODEL
dc.subject	TRADE MORE
dc.subject	TRADE OPENNESS
dc.subject	TRADE PARTNERS
dc.subject	TRADE PATTERNS
dc.subject	TRADE PERFORMANCE
dc.subject	TRADE VARIABLES
dc.subject	TRADE VOLUMES
dc.subject	TRADE ZONE
dc.subject	TRADING PATTERNS
dc.subject	TRAFFIC
dc.subject	TRANSIT
dc.subject	TRANSPORT
dc.subject	TRANSPORT COSTS
dc.subject	TRANSPORT INFRASTRUCTURE
dc.subject	TRANSPORT MODES
dc.subject	TRANSPORT SERVICES
dc.subject	TRANSPORTATION
dc.subject	TRANSPORTATION COSTS
dc.subject	TRANSPORTATION SERVICES
dc.subject	TUBES
dc.subject	VEGETABLE OILS
dc.subject	VEGETABLES
dc.subject	VITAMINS
dc.subject	WAXES
dc.subject	WHEAT
dc.title	Understanding the Benefits of Regional Integration to Trade : The Application of a Gravity Model to the Case of Central America
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	Latin America & Caribbean
dc.coverage	Central America