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The Consideration Of Hub-And-Spoke Status In Fta Formation

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  • Jiyun Cao

Abstract

type="main"> This paper extends the literature on the determinants of free trade area (FTA) taking hub-and-spoke status and hub status-seeking into account. The analysis is based on purely cross-sectional data and the main findings are different from previous studies. First, the hub-and-spoke status and hub status-seeking are two important determinants of FTA. Moreover, the hub-and-spoke status and hub status-seeking have greater partial effects on the response probabilities than other determinants. Second, the probability of forming an FTA between a pair of economies is higher if they share a common language. Finally, the probability of forming an FTA between a pair of economies falls at first but eventually increases as the difference in their relative factor endowments increases.

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  • Jiyun Cao, 2015. "The Consideration Of Hub-And-Spoke Status In Fta Formation," Bulletin of Economic Research, Wiley Blackwell, vol. 67(4), pages 382-392, October.
    • Handle: RePEc:bla:buecrs:v:67:y:2015:i:4:p:382-392
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    References listed on IDEAS

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    1. Hur, Jung & Alba, Joseph D. & Park, Donghyun, 2010. "Effects of Hub-and-Spoke Free Trade Agreements on Trade: A Panel Data Analysis," World Development, Elsevier, vol. 38(8), pages 1105-1113, August.
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