Hub-and-Spokes Free-Trade-Agreements in the Presence of Technology Spillovers: An Application to the Western Hemisphere
USITC Office of Economics Working Paper No. 2004-09-A
39 Pages Posted: 13 Sep 2004
There are 2 versions of this paper
Hub-and-Spokes Free-Trade-Agreements in the Presence of Technology Spillovers: An Application to the Western Hemisphere
Hub-and-Spokes Free Trade Agreements in the Presence of Technology Spillovers: An Application to the Western Hemisphere
Abstract
Using a comparative-static general equilibrium model and in the context of the western hemisphere, this paper compares the economic effects of a hub-and-spokes (HAS) type of bilateral trade configuration (with Chile being the hub) with those of a more comprehensive regional FTA (namely, the FTAA). The model is augmented to account for the possibility of technology spillovers and its effective assimilation among participating economies. In particular, absorptive capacity, governance factor, proximity and socio-institutional congruence conjointly determine an economy's capacity to capture the technology that is transmitted from developed spoke US to other regions.
Keywords: Hub and Spokes, Free Trade Areas, Technology transfer, Absorption
JEL Classification: D58, F16, O4
Suggested Citation: Suggested Citation
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