 Overlapping free trade agreements and international trade: A network approachSilvia Sopranzetti The World Economy, 2018, vol. 41, issue 6, 1549-1566 Abstract: In our work, we have analysed the effect of the hub†and†spoke nature of free trade agreements (FTAs) on trade. Contrary to previous analyses, we have considered the effects of the country's position in the FTA network on the bilateral trade of the hub country. We have conducted an in†depth analysis of the global network of FTAs, focusing particularly on its evolution in the last 15 years. We have utilised a panel data set covering the period 1960–2010 to investigate the effects of the hub†and†spoke on trade. Our results show that the countries that are more connected to FTAs export more than those that are less involved, although not all the partner countries you can connect with are the same. An increase in the number of spokes that have no link between them has, on average, a negative effect on the trade of the hub, which indicates that signing FTAs with every country is not the optimal strategy for increasing trade. However, if we consider the way new FTAs change the relative position of a country, we can see that if new FTAs make the country more central or less constrained in the network, these new agreements have a strongly positive and significant pro†trade effect. Date: 2018 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:41:y:2018:i:6:p:1549-1566 Ordering information: This journal article can be ordered from Access Statistics for this article The World Economy is currently edited by David Greenaway More articles in The World Economy from Wiley Blackwell |
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