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Playing Dominoes in Europe: An Empirical Analysis of the Domino Theory for the EU, 1962-2004

Roland Rieder ()
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Roland Rieder: IUHEI, The Graduate Institute of International Studies, Geneva

No 11-2006, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: This paper addresses the question whether the domino theory of regionalism is a reasonable explanation for the growth in EU membership over the past forty years. In essence, this theory states that the conclusion of a new regional trade agreement or the deepening of an existing one will induce non-members to join the trade bloc. The empirical analysis proceeds in two stages. First, a gravity analysis shows that the EU was more attractive than EFTA since it triggered a higher degree of trade diversion. In a second step, a discrete choice model is used to assess the importance of variables reflecting domino effects relative to other possible determinants of EU expansion. The findings provide convincing evidence in support of the domino theory.

Keywords: Regional trade agreements; Western Europe; gravity equation; panel econometrics; qualitative choice models (search for similar items in EconPapers)
JEL-codes: C23 C25 F15 (search for similar items in EconPapers)
Pages: 47
Date: 2006-05, Revised 2006-06
New Economics Papers: this item is included in nep-dcm and nep-his
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Citations: View citations in EconPapers (6)

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