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A South American Perspective: Regional versus Global Trade Patterns

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  • Diego Agudelo

    (EAFIT University)

  • Galia Julieta Benitez
  • Larry Davidson

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

Abstract

This study presents evidence of the increasing regionalization of the international trade of ten South American countries from 1980 to 2001. We found that the regionalization of trade in South America is best described as an increasing trade among Spanish-speaking countries and increasing trade within the two regional agreements: Andean Community and Mercosur. We also find evidence of border erosion in the continent, especially among the Mercosur members. These results are evident in a simple statistical analysis and are also economically significant when tested in a consistent gravity equation that controls for a set of macroeconomic and geographic variables.

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File URL: http://www.bus.indiana.edu/riharbau/RePEc/iuk/wpaper/bepp2006-16-agudelo-benitez-davidson.pdf
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Bibliographic Info

Paper provided by Indiana University, Kelley School of Business, Department of Business Economics and Public Policy in its series Working Papers with number 2006-16.

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Date of creation: 2006
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Handle: RePEc:iuk:wpaper:2006-16

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  1. Soloaga, Isidro & Winters, L. Alan, 1999. "Regionalism in the Nineties: What Effect on Trade?," CEPR Discussion Papers 2183, C.E.P.R. Discussion Papers.
  2. James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
  3. Andrew K. Rose, 2002. "Do We Really KNow that the WTO Increases Trade?," Working Papers 182002, Hong Kong Institute for Monetary Research.
  4. Diego Agudelo & Larry Davidson, 2006. "The Gravity of Globalization," Working Papers 2006-15, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  5. Andrew K. Rose & Eric van Wincoop, 2001. "National Money as a Barrier to International Trade: The Real Case for Currency Union," American Economic Review, American Economic Association, vol. 91(2), pages 386-390, May.
  6. Wise Carol, 1999. "Latin American Trade Strategy at Century's End," Business and Politics, De Gruyter, vol. 1(2), pages 117-202, August.
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Cited by:
  1. Cortes, Maria, 2007. "Composition of Trade between Australia and Latin America: Gravity Model," Economics Working Papers wp07-19, School of Economics, University of Wollongong, NSW, Australia.

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