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Determinants of regional integration agreements in a discrete choice framework: re-examining the evidence

Author

Listed:
  • Laura Márquez-Ramos

    (Departamento de Economía and Instituto de Economía Internacional, Universitat Jaume I)

  • Inmaculada Martínez-Zarzoso

    (Departamento de Economía and Instituto de Economía Internacional, Universitat Jaume I)

  • Celestino Suárez-Burguet

    (Departamento de Economía and Instituto de Economía Internacional, Universitat Jaume I)

Abstract

This paper provides new empirical evidence on the determinants of regional integration agreements (RIAs) in a discrete choice modelling framework. The research has two main aims: first, to empirically analyse the determinants of different levels of integration, re-examining the evidence presented by Baier and Bergstrand (2004) in the JIE 64 (1); and second, to analyse the importance of additional factors, in particular socio-political factors. The results show that geographical factors alone are the most important explanatory factors for the probability of regional integration agreement formation or enhancement, thus supporting the theories on "natural" trading partners. The socio-political factors considered, democracy dummy, the level of economic freedom and the common language dummy are all statistically significant, although their relative importance in explaining RIA formation is low.

Suggested Citation

  • Laura Márquez-Ramos & Inmaculada Martínez-Zarzoso & Celestino Suárez-Burguet, 2005. "Determinants of regional integration agreements in a discrete choice framework: re-examining the evidence," Working Papers 05-10, Asociación Española de Economía y Finanzas Internacionales.
    • Handle: RePEc:aee:wpaper:0510
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    References listed on IDEAS

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    2. Frankel, Jeffrey A & Stein, Ernesto & Wei, Shang-Jin, 1996. "Regional Trading Arrangements: Natural or Supernatural," American Economic Review, American Economic Association, vol. 86(2), pages 52-56, May.
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    More about this item

    Keywords

    Regional integration agreements; discrete choice models; trade flows; natural partners;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration

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