Are Free Trade Agreements Contagious?

Richard Baldwin and Dany Jaimovich

Global COE Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: This paper presents empirical evidence on the extent to which FTAs are gcontagioush, using empirical techniques inspired by the study of contagion in exchange rate crises. Applying a series of different econometric techniques, it tests the null hypothesis that the signing of an FTA between one nationfs trade partners has no affect on the probability of the nation signing a new FTA. The hypothesis is tested against other political, economical and geographical determinants of the FTA formation previously stated in the literature, finding evidence that the contagion phenomenon is present in different specifications and samples.

Keywords: Contagion Effect; Free Trade Agreements and International Trade (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int and nep-lam
Date: 2009-04

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http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd09-057.pdf (application/pdf)

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Working Paper: Are Free Trade Agreements Contagious? (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:hst:ghsdps:gd09-057

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