IDEAS home Printed from https://ideas.repec.org/p/zbw/zeiwps/b122004.html
   My bibliography  Save this paper

Measuring and explaining levels of regional economic integration

Author

Listed:
  • Pédussel Wu, Jennifer

Abstract

124 Regional Trade Agreements were notified to the GATT during the period 1948-1994. Since 1995, over 130 agreements have been notified to the WTO. Using empirical evidence, this paper proposes a way of measuring levels of regional integration and examines several potential explanations for the existence of different levels of regional economic integration. Using a database of regional integration where levels of integration are ranked across countries, a probit analysis in a discrete choice framework is applied. Common traits influencing regional integration decision-making were examined to determine those most influential. It is concluded that democracy and economic freedom, are significant contributors to the chosen level of regional integration. The role of political and economic uncertainty is examined and it is found that trade uncertainty is also a significant contributing factor.

Suggested Citation

  • Pédussel Wu, Jennifer, 2004. "Measuring and explaining levels of regional economic integration," ZEI Working Papers B 12-2004, University of Bonn, ZEI - Center for European Integration Studies.
    • Handle: RePEc:zbw:zeiwps:b122004
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/39591/1/393967123.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brownstone, David & Golob, Thomas F., 1992. "The effectiveness of ridesharing incentives: Discrete-choice models of commuting in Southern California," Regional Science and Urban Economics, Elsevier, vol. 22(1), pages 5-24, March.
    2. Graham Bird & Ramkishen Rajan, 2002. "The Political Economy of A Trade-First Approach to Regionalism," Centre for International Economic Studies Working Papers 2002-18, University of Adelaide, Centre for International Economic Studies.
    3. Jennifer Pédussel Wu, 2005. "Trade Agreements as Self‐Protection," Review of International Economics, Wiley Blackwell, vol. 13(3), pages 472-484, August.
    4. David Romer, 1993. "Openness and Inflation: Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(4), pages 869-903.
    5. Edward D. Mansfield & Helen V. Milner & B. Peter Rosendorff, 2015. "Why Democracies Cooperate More: Electoral Control and International Trade Agreements," World Scientific Book Chapters, in: Edward D Mansfield (ed.), THE POLITICAL ECONOMY OF INTERNATIONAL TRADE, chapter 11, pages 227-263, World Scientific Publishing Co. Pte. Ltd..
    6. Carlo Perroni & John Whalley, 2000. "The new regionalism: trade liberalization or insurance?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(1), pages 1-24, February.
    7. Baier, Scott L. & Bergstrand, Jeffrey H., 2004. "Economic determinants of free trade agreements," Journal of International Economics, Elsevier, vol. 64(1), pages 29-63, October.
    8. Ethier, Wilfred J, 1998. "The New Regionalism," Economic Journal, Royal Economic Society, vol. 108(449), pages 1149-1161, July.
    9. Mattli,Walter, 1999. "The Logic of Regional Integration," Cambridge Books, Cambridge University Press, number 9780521635363.
    10. Park, Donghyun, 1999. "The Prospects for Further Economic Integration in ASEAN," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 14, pages 382-418.
    11. Fernandez, Raquel & Portes, Jonathan, 1998. "Returns to Regionalism: An Analysis of Nontraditional Gains from Regional Trade Agreements," The World Bank Economic Review, World Bank, vol. 12(2), pages 197-220, May.
    12. John Whalley, 1998. "Why Do Countries Seek Regional Trade Agreements?," NBER Chapters, in: The Regionalization of the World Economy, pages 63-90, National Bureau of Economic Research, Inc.
    13. Mattli,Walter, 1999. "The Logic of Regional Integration," Cambridge Books, Cambridge University Press, number 9780521632270.
    14. Becker, William E. & Kennedy, Peter E., 1992. "A Graphical Exposition of the Ordered Probit," Econometric Theory, Cambridge University Press, vol. 8(1), pages 127-131, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Laura Márquez-Ramos & Inmaculada Martínez-Zarzoso & Celestino Suárez-Burguet, 2011. "Determinants of Deep Integration: Examining Socio-political Factors," Open Economies Review, Springer, vol. 22(3), pages 479-500, July.
    2. Jose Jaime Baena-Rojas & Susana Herrero-Olarte, 2020. "From Preferential Trade Arrangements to Free Trade Agreements: One of the Downturns of Cooperation in International Relations?," Social Sciences, MDPI, vol. 9(8), pages 1-17, August.
    3. Baldwin, Richard & Jaimovich, Dany, 2012. "Are Free Trade Agreements contagious?," Journal of International Economics, Elsevier, vol. 88(1), pages 1-16.
    4. Celestino Suárez-Burgnet & Inmaculada Martínez-Zarzoso & Laura Márquez-Ramos, "undated". "Determinants of regional integration agreements in a discrete choice framework: Re-Examining the evidence," Working Papers on International Economics and Finance 05-10, FEDEA.
    5. Baldwin, Richard Edward & Rieder , Roland, 2007. "A Test of Endogenous Trade Bloc Formation Theory on EU Data," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 11(2), pages 77-110, December.
    6. Roland Rieder, 2006. "Playing Dominoes in Europe: An Empirical Analysis of the Domino Theory for the EU, 1962-2004," IHEID Working Papers 11-2006, Economics Section, The Graduate Institute of International Studies, revised Jun 2006.
    7. Jošić Hrvoje & Žmuk Berislav & Dumičić Ksenija, 2019. "Measurement of Export Market Concentration for the Largest European Economic Integrations," Business Systems Research, Sciendo, vol. 10(2), pages 61-72, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leonardo Baccini, 2010. "Explaining formation and design of EU trade agreements: The role of transparency and flexibility," European Union Politics, , vol. 11(2), pages 195-217, June.
    2. Baccini, Leonardo, 2010. "Explaining formation and design of EU trade agreements: the role of transparency and flexibility," LSE Research Online Documents on Economics 45565, London School of Economics and Political Science, LSE Library.
    3. Baccini, Leonardo, 2012. "Democratization and trade policy: an empirical analysis of developing countries," LSE Research Online Documents on Economics 44924, London School of Economics and Political Science, LSE Library.
    4. Baccini, Leonardo & Dür, Andreas & Elsig, Manfred & Milewicz, Karolina, 2011. "The design of preferential trade agreements: A new dataset in the Making," WTO Staff Working Papers ERSD-2011-10, World Trade Organization (WTO), Economic Research and Statistics Division.
    5. Antoni Estevadeordal & Kati Suominen, 2008. "Sequencing Regional Trade Integration and Cooperation Agreements," The World Economy, Wiley Blackwell, vol. 31(1), pages 112-140, January.
    6. Vicard, Vincent, 2012. "Trade, conflict, and political integration: Explaining the heterogeneity of regional trade agreements," European Economic Review, Elsevier, vol. 56(1), pages 54-71.
    7. Edward D. Mansfield & Helen V. Milner & Jon C. Pevehouse, 2008. "Democracy, Veto Players and the Depth of Regional Integration," The World Economy, Wiley Blackwell, vol. 31(1), pages 67-96, January.
    8. Ka Zeng & Karen Sebold & Yue Lu, 2020. "Global value chains and corporate lobbying for trade liberalization," The Review of International Organizations, Springer, vol. 15(2), pages 409-443, April.
    9. Antonis Adam & Thomas Moutos, 2002. "The Political Economy of EU Enlargement: Or, Why Japan is not a Candidate Country?," CESifo Working Paper Series 704, CESifo.
    10. Richard Baldwin, 2008. "Big-Think Regionalism: A Critical Survey," NBER Working Papers 14056, National Bureau of Economic Research, Inc.
    11. Baccini, Leonardo, 2014. "Cheap talk: transaction costs, quality of institutions, and trade agreements," LSE Research Online Documents on Economics 44923, London School of Economics and Political Science, LSE Library.
    12. Baldwin, Richard Edward & Rieder , Roland, 2007. "A Test of Endogenous Trade Bloc Formation Theory on EU Data," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 11(2), pages 77-110, December.
    13. Salazar-Xirinachs, Jose M., 2002. "Proliferation of sub-Regional Trade Agreements in the Americas: an assessment of key analytical and policy issues," Journal of Asian Economics, Elsevier, vol. 13(2), pages 181-212.
    14. Johannes Urpelainen, 2012. "How Does Democratic Accountability Shape International Cooperation?," Conflict Management and Peace Science, Peace Science Society (International), vol. 29(1), pages 28-55, February.
    15. Hefeker, Carsten, 2003. "Handels- und Finanzarchitektur im Umbruch: Globale Integration und die institutionelle Arbeitsteilung von IWF, Weltbank und WTO," HWWA Discussion Papers 225, Hamburg Institute of International Economics (HWWA).
    16. Saori N. Katada, 2010. "Political Economy of East Asian Regional Integration and Cooperation," Working Papers id:3059, eSocialSciences.
    17. Mr. Kangni R Kpodar & Patrick A. Imam, 2015. "Does A Regional Trade Agreement Lessen or Exacerbate Growth Volatility? An Empirical Investigation," IMF Working Papers 2015/177, International Monetary Fund.
    18. Hamanaka, Shintaro, 2018. "Why breakup?: looking into unsuccessful free trade agreement negotiations," IDE Discussion Papers 697, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    19. Yoram Haftel, 2013. "Commerce and institutions: Trade, scope, and the design of regional economic organizations," The Review of International Organizations, Springer, vol. 8(3), pages 389-414, September.
    20. Kangni Kpodar & Patrick Imam, 2016. "Does a Regional Trade Agreement Lessen or Worsen Growth Volatility? An Empirical Investigation," Review of International Economics, Wiley Blackwell, vol. 24(5), pages 949-979, November.

    More about this item

    Keywords

    Regional Economic Integration; Ordered-Probit Estimation; Uncertainty;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F15 - International Economics - - Trade - - - Economic Integration
    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • C19 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:zeiwps:b122004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zeibnde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.