Top Page > Research Results - Discussion Papers > No.57
Are Free Trade Agreements Contagious?
April 2009
Abstract
This paper presents empirical evidence on the extent to which FTAs are “contagious”, using empirical techniques inspired by the study of contagion in exchange rate crises. Applying a series of different econometric techniques, it tests the null hypothesis that the signing of an FTA between one nation’s trade partners has no affect on the probability of the nation signing a new FTA. The hypothesis is tested against other political, economical and geographical determinants of the FTA formation previously stated in the literature, finding evidence that the contagion phenomenon is present in different specifications and samples.
