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Growth Effects of Regional Integration Agreements

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  • Matías Berthelon

Abstract

During the 1990’s the world experienced a new wave of regional integration agreements (RIAs) that reached unprecedented proportions. In the presence of economies of scale or extent-of-the market effects RIAs may have positive growth effects. I introduce a new measure of regional integration by interacting country membership to a RIA and the partners’ share of world GDP, which allows capturing differentiated effects depending on the size of the partners. Results indicate that RIAs have exerted positive effects on growth. In addition, I find that North-North agreements have significant growth effects; South-South agreements have ambiguous effects depending on the size of the countries joining them, and that there is no clear answer for North-South agreements.

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  • Matías Berthelon, 2004. "Growth Effects of Regional Integration Agreements," Working Papers Central Bank of Chile 278, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:278
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