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Effects of Hub-and-Spoke Free Trade Agreements on Trade: A Panel Data Analysis

  • Hur, Jung
  • Alba, Joseph D.
  • Park, Donghyun

Summary We use panel data consisting of 96 countries and covering the period 1960-2000 to investigate the effects of free trade agreements (FTAs) and hub-and-spoke systems of FTA on exports. Our empirical results imply an annual growth rate of 5.57% in exports and hence a doubling of exports after 12.4 years between FTA partners. Non-overlapping FTAs account for 4.12%, while hub-and-spoke FTAs account for 1.45% of the estimated export growth rate. This indicates that, in addition to the direct trade liberalizing effect of FTAs, the hub-and-spoke nature of FTAs has an additional positive effect on trade.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 38 (2010)
Issue (Month): 8 (August)
Pages: 1105-1113

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Handle: RePEc:eee:wdevel:v:38:y:2010:i:8:p:1105-1113
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

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  1. Andrew K. Rose, 2002. "Do We Really Know that the WTO Increases Trade?," NBER Working Papers 9273, National Bureau of Economic Research, Inc.
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