Are Free Trade Agreements Contagious?
35 Pages Posted: 19 Jul 2010
There are 2 versions of this paper
Are Free Trade Agreements Contagious?
Date Written: June 2010
Abstract
This paper presents a new model of the domino effect which is used to generate an empirical index of how "contagious" FTAs are with respect to third nations due to the trade diversion. We test our contagion hypothesis together with alternative specifications of interdependence and other political, economical and geographical determinants of FTA formation. Our main finding is that contagion is present in our data and is robust to various econometric specifications and samples.
Keywords: Contagion Effec, Free Trade Agreements, International Trade
JEL Classification: F13
Suggested Citation: Suggested Citation
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