Interdependent preferential trade agreement memberships: An empirical analysis

Peter H. Egger () and Mario Larch ()

Journal of International Economics, 2008, vol. 76, issue 2, pages 384-399

Abstract: The establishment of a new preferential trade agreement (PTA) or the expansion of an existing one alters the incentives of non-members to participate in a PTA. This can lead to a domino effect whereby non-members join an existing PTA. Or it can lead a pair of countries to establish a new PTA. We examine the determinants of why a pair of countries enters a bilateral PTA. Our emphasis is on (a) the impact of pre-existing PTAs and (b) whether this impact is larger when the members of pre-existing PTAs are on average geographically close to the pair of countries. Using data for 145 countries during 1955-2005, we find evidence that pre-existing PTAs increase the probability that a country-pair will enter a bilateral PTA and that this effect diminishes with distance. The analysis makes use of techniques drawn from spatial econometrics.

Keywords: Preferential; trade; agreements; Probit; model; Spatial; econometrics; F15; C11; C15; C25 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (31) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6V6D ... 5389c2a8cb76353ac1f9
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:inecon:v:76:y:2008:i:2:p:384-399

Access Statistics for this article

Journal of International Economics is edited by C. M. Engel and R.W. Staiger

More articles in Journal of International Economics from Elsevier
Series data maintained by Wendy Shamier ().