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Are Free Trade Agreements contagious?

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  • Baldwin, Richard
  • Jaimovich, Dany

Abstract

This paper tests the hypothesis that the domino-like spread of regionalism is partly driven by ‘defensive’ FTAs, i.e. FTAs signed to reduce discrimination created by third-nation FTAs. A theory-based measure is used to test contagion against alternative determinants of regionalism. The main finding is that contagion is present in our data and robust to various econometric specifications, samples, and inclusions of various economic and political controls including the Baier–Bergstrand controls. Some support is found for political theories that stress ‘political distance’ but none for those that stress ‘slow multilateralism’.

Suggested Citation

  • Baldwin, Richard & Jaimovich, Dany, 2012. "Are Free Trade Agreements contagious?," Journal of International Economics, Elsevier, vol. 88(1), pages 1-16.
    • Handle: RePEc:eee:inecon:v:88:y:2012:i:1:p:1-16
    DOI: 10.1016/j.jinteco.2012.03.009
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    More about this item

    Keywords

    Contagion index; Free Trade Agreements; International trade; Regionalism; Domino theory of regionalism;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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