Third-country effects on the formation of free trade agreements
The recent proliferation of free trade agreements (FTAs) has resulted in an increasingly complex network of preferential trading relationships. The economics literature has generally examined the formation of FTAs as a function of the participating countries' economic characteristics alone. In this paper, we show both theoretically and empirically that the decision to enter into an FTA is also crucially dependent on the participating countries' existing FTA relationships with third countries. Accounting for the interdependence of FTAs helps to explain a significant fraction of FTA formations that would not otherwise be predicted by countries' economic characteristics.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Taiji Furusawa & Hideo Konishi, 2002.
"Free Trade Networks,"
Boston College Working Papers in Economics
548, Boston College Department of Economics, revised 08 Sep 2003.
- Helpman, Elhanan & Antras, Pol & Aghion, Philippe, 2007.
"Negotiating Free Trade,"
3351239, Harvard University Department of Economics.
- Kamal Saggi, 2006. "Preferential Trade Agreements And Multilateral Tariff Cooperation ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(1), pages 29-57, 02.
- Choi, E. Kwan & Harrigan, James, 2003. "Handbook of International Trade," Staff General Research Papers 11375, Iowa State University, Department of Economics.
- Davis, D.R. & Weinstein, D.E., 1999.
"An Account of Global Factor Trade,"
435, Research Seminar in International Economics, University of Michigan.
- Donald R. Davis & David E. Weinstein, 1998. "An Account of Global Factor Trade," NBER Working Papers 6785, National Bureau of Economic Research, Inc.
- Donald R. Davis & David E. Weinstein, 1998. "An Account of Global Factor Trade," Harvard Institute of Economic Research Working Papers 1849, Harvard - Institute of Economic Research.
- Bond, Eric W. & Syropoulos, Constantinos, 1996. "The size of trading blocs Market power and world welfare effects," Journal of International Economics, Elsevier, vol. 40(3-4), pages 411-437, May.
- Maggie Xiaoyang Chen & Sumit Joshi, 2010.
"Third-Country Effects on the Formation of Free Trade Agreements,"
2008-16, The George Washington University, Institute for International Economic Policy.
- Chen, Maggie Xiaoyang & Joshi, Sumit, 2010. "Third-country effects on the formation of free trade agreements," Journal of International Economics, Elsevier, vol. 82(2), pages 238-248, November.
- Chen, Maggie & Joshi, Sumit, 2010. "Third-Country Effects on the Formation of Free Trade Agreements," MPRA Paper 23507, University Library of Munich, Germany.
- Sang-Seung, Yi, 1996. "Endogenous formation of customs unions under imperfect competition: open regionalism is good," Journal of International Economics, Elsevier, vol. 41(1-2), pages 153-177, August.
- Eric W. Bond & Raymond G. Riezman & Constantinos Syropoulos, 2013.
"A strategic and welfare theoretic analysis of free trade areas,"
World Scientific Book Chapters,
in: International Trade Agreements and Political Economy, chapter 8, pages 101-127
World Scientific Publishing Co. Pte. Ltd..
- Bond, Eric W. & Riezman, Raymond G. & Syropoulos, Constantinos, 2004. "A strategic and welfare theoretic analysis of free trade areas," Journal of International Economics, Elsevier, vol. 64(1), pages 1-27, October.
- Caroline Freund, 2000. "Different Paths To Free Trade: The Gains From Regionalism," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1317-1341, November.
- Keith E. Maskus & Shuichiro Nishioka, 2009.
"Development-related biases in factor productivities and the HOV model of trade,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 42(2), pages 519-553, May.
- Keith E. Maskus & Shuichiro Nishioka, 2008. "Development-Related Biases in Factor Productivities and the HOV Model of Trade," CESifo Working Paper Series 2253, CESifo Group Munich.
- Richard Baldwin, 1993.
"A Domino Theory of Regionalism,"
NBER Working Papers
4465, National Bureau of Economic Research, Inc.
- Pravin Krishna, 1998.
"Regionalism And Multilateralism: A Political Economy Approach,"
The Quarterly Journal of Economics,
MIT Press, vol. 113(1), pages 227-250, February.
- Pravin Krishna, . "Regionalism and Multilaterialism: A Political Economy Approach," Working Papers 96-5, Brown University, Department of Economics.
- Goyal, S. & Joshi, S., 1999.
"Bilateralism and free trade,"
Econometric Institute Research Papers
EI 9953-/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- Trefler, Daniel, 1993. "International Factor Price Differences: Leontief Was Right!," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 961-87, December.
- Scott L. Baier & Jeffrey H. Bergstrand & Peter Egger, 2007. "The New Regionalism: Causes and Consequences," International Economics, CEPII research center, issue 109, pages 9-29.
- Magee Christopher S, 2003. "Endogenous Preferential Trade Agreements: An Empirical Analysis," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-19, December.
- Ornelas, Emanuel, 2005. "Trade creating free trade areas and the undermining of multilateralism," European Economic Review, Elsevier, vol. 49(7), pages 1717-1735, October.
- Bhaskar Dutta & Sayantan Ghosal & Debraj Ray, 2004.
"Farsighted Network Formation,"
122, Centre for Development Economics, Delhi School of Economics.
- 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.
- Bagwell, Kyle & Staiger, Robert W., 2004. "Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO," Journal of International Economics, Elsevier, vol. 63(1), pages 1-29, May.
- 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.
When requesting a correction, please mention this item's handle: RePEc:eee:inecon:v:82:y:2010:i:2:p:238-248. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.