Do Customs Union Members Engage in More Bilateral Trade than Free-Trade Agreement Members?

ASU Author/Contributor (non-ASU co-authors, if there are any, appear on document)
Jayjit Roy Ph.D., Assistant Professor (Creator)
Appalachian State University (ASU )
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Abstract: This paper provides the first empirical analysis directly comparing the effects of customs unions (CUs) and free-trade agreements (FTAs) on members’ bilateral trade, while addressing the biases arising from loglinearization of the gravity model and crucial time-invariant unobservables. Since Fiorentino et al. (2007) question the popularity of CUs relative to FTAs, considering the latter to be more practical in the current trading climate, such a comparison seems especially relevant. While Baier and Bergstrand (2007) find an FTA to approximately double members’ bilateral trade after 10 years, the results of this paper find CUs to have had a much larger impact than FTAs.

Additional Information

Roy, J. (2010). Do customs union members engage in more bilateral trade than free-trade agreement members? Review of International Economics, 18(4), 663-681. ISSN: 1467-9396. doi:10.1111/j.1467-9396.2010.00904.x
Language: English
Date: 2010

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