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What Kinds of Countries Have More Free Trade Partner Countries? - Count Regression Analysis

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  • Jung Hur

    (Korean Institute for International Economic Policy)

  • Backhoon Song
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Abstract

According to the WTO data for regional trade agreements (RTA), the number of RTA has been exponentially growing since the middle of the 1990s. As a result, many countries these days have had more than one free trade partner country. In this paper, we attempt to find out statistically important characteristics of countries that may explain the frequency of a countrys RTA formations and as a result its total number of free trade partner countries. We find that the following country-specific variables are important : distance from equator, government effectiveness, and the low-middle income group countries and regional blocs that countries belong to. In contrast, the following variables are not statistically significant : geographical size of country; upper-middle or high-income group countries; languages and other institutional variables such as political aspects and the stability, law, regulation, and national corruption level. The important implication of the findings is that the current expansion of RTAs may not be linked to a global free trade system because of the peculiarity of countries having multiple RTAs.

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Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series Trade Working Papers with number 22002.

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Date of creation: Jan 2007
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Handle: RePEc:eab:tradew:22002

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Related research

Keywords: Regional Trade Agreements; Poisson regression; negative binomial regression; cross section data;

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  1. Drusilla K. Brown & Kozo Kiyota & Robert M. Stern, 2006. "Computational Analysis of the Menu of US-Japan Trade Policies," The World Economy, Wiley Blackwell, vol. 29(6), pages 805-855, 06.
  2. Egger, Peter & Larch, Mario, 2008. "Interdependent preferential trade agreement memberships: An empirical analysis," Journal of International Economics, Elsevier, vol. 76(2), pages 384-399, December.
  3. AndrewK. Rose & MarkM. Spiegel, 2007. "Offshore Financial Centres: Parasites or Symbionts?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 117(523), pages 1310-1335, October.
  4. Pravin Krishna, 1998. "Regionalism And Multilateralism: A Political Economy Approach," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(1), pages 227-250, February.
  5. Frankel, Jeffrey & Stein, Ernesto & Wei, Shang-jin, 1995. "Trading blocs and the Americas: The natural, the unnatural, and the super-natural," Journal of Development Economics, Elsevier, vol. 47(1), pages 61-95, June.
  6. Borrmann, Axel & Busse, Matthias & Neuhaus, Silke, 2006. "Institutional Quality and the Gains From Trade," HWWA Discussion Papers 341, Hamburg Institute of International Economics (HWWA).
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