The B.E. Journal of Economic Analysis & Policy
Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra
Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Zulehner, Christine / Schirle, Tammy
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Endogenous Preferential Trade Agreements: An Empirical Analysis
1Bucknell University, (email)
Citation Information: Contributions in Economic Analysis & Policy. Volume 2, Issue 1, ISSN (Online) 1538-0645, DOI: 10.2202/1538-0645.1166, December 2003
- Published Online:
This paper provides one of the first assessments of the hypothesis that two countries are more likely to form a preferential trade agreement (PTA) if they are already major trading partners. The paper also tests a number of predictions from the political economy literature about which countries are expected to form regional agreements. The results show that countries are more likely to be preferential trading partners if they have significant bilateral trade, are similar in size, and are both democracies. Finally, the paper measures the effect of preferential agreements on trade volumes while, unlike previous studies, treating PTA formation as endogenous.
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