Who Benefits from Regional Trade Agreements? The View from the Stock Market

Christoph Moser () and Andrew Rose

No 17415, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The effects of Regional Trade Agreements (RTAs) are disputed. In this paper, we assess these effects using capital market data and an event-study approach, using a daily data set covering a thousand announcements spanning over eighty economies and a hundred RTAs over twenty recent years. We measure the effects of news concerning RTAs on the returns of national stock markets, adjusted for international stock market movements. We then link these excess returns to features of the RTA members and the agreements themselves. We find evidence of the natural trading partner hypothesis; stock markets rise more when RTAs are signed between countries that already engage in high volumes of trade. Stock markets also rise more when poorer countries sign RTAs.

JEL-codes: F10 F13 G14 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-mst
Note: IFM ITI
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Citations: View citations in EconPapers (7)

Published as Moser, Christoph & Rose, Andrew K., 2014. "Who benefits from regional trade agreements? The view from the stock market," European Economic Review, Elsevier, vol. 68(C), pages 31-47.

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Journal Article: Who benefits from regional trade agreements? The view from the stock market (2014)
Working Paper: Who Benefits from Regional Trade Agreements? The View from the Stock Market (2011)
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