Why Do Countries Form Regional Trade Agreements? A Discrete-Time Survival Analysis

Teresa L. Cyrus ()
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Teresa L. Cyrus: Dalhousie University

Open Economies Review, 2021, vol. 32, issue 2, No 8, 417-434

Abstract: Abstract This paper seeks to determine why countries form regional trade agreements. Using bilateral data from 1950 to 2013 for 468 trade agreements and 179 countries, I use survival analysis to examine the factors that determine the likelihood of two countries entering into a trade agreement at any point in time. Potential explanatory variables include prior trade flows, export distance, GDP, per-capita GDP, geography, culture, and institutions. The results show that trade, per-capita GDP, and similarities in culture and institutions increase the likelihood that two countries will form a regional trade agreement. Larger, more distant, and more isolated countries are less likely to form an RTA, as are country-pairs that are different in size.

Keywords: Trade; Regional trade agreements; Duration; Survival (search for similar items in EconPapers)
JEL-codes: E02 F13 F14 F15 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s11079-020-09603-5

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