Do Hub-and-Spoke Free Trade Agreements Increase Trade? A Panel Data Analysis

Joseph Alba, Jung Hur and Donghyun Park

No 46, Working Papers on Regional Economic Integration from Asian Development Bank

Abstract: We use panel data consisting of 96 countries and covering the period 1960–2000 to investigate the effects of free trade agreements (FTAs) and hub-and-spoke systems of FTAs on exports. Our empirical results imply an annual growth rate of 5.57% in exports, leading to a doubling of exports after 12.4 years, between FTA partners. Non-overlapping FTAs account for 4.12%, while hub-and-spoke FTAs account for 1.45% of the estimated export growth rate. This indicates that in addition to the direct trade liberalizing effect of FTAs, the hub-and-spoke nature of FTAs has an additional positive effect on trade.

Keywords: free trade agreement; hub and spoke; world bilateral trade data; panel data analysis; fixed effect; average treatment effect (search for similar items in EconPapers)
JEL-codes: F15 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2010-04-01
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbrei:0046

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