IDEAS home Printed from https://ideas.repec.org/a/bla/rdevec/v1y1997i2p153-170.html
   My bibliography  Save this article

International Trade, Regional Free Trade Agreements, and Economic Development

Author

Listed:
  • Scott L. Baier
  • Jeffrey H. Bergstrand

Abstract

In 1991, Krugman illustrated that natural (regional) free trade agreements (FTAs) are likely to be welfare‐enhancing if intercontinental costs are prohibitively high, but are likely to be welfare‐reducing if such costs are zero. In 1995, Frankel, Stein and Wei extended the analysis to consider positive but nonprohibitive transport costs. This paper extends these models to allow for countries of different economic size. Large countries will tend to have higher relative wages, influencing the relative gains and losses from natural FTAs. For even modest differences in size, intracontinental FTAs are welfare‐enhancing for larger countries, regardless of strong preferences for diversity or low intercontinental transport costs.

Suggested Citation

  • Scott L. Baier & Jeffrey H. Bergstrand, 1997. "International Trade, Regional Free Trade Agreements, and Economic Development," Review of Development Economics, Wiley Blackwell, vol. 1(2), pages 153-170, June.
    • Handle: RePEc:bla:rdevec:v:1:y:1997:i:2:p:153-170
    DOI: 10.1111/1467-9361.00011
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1467-9361.00011
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1467-9361.00011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Swetha Loganathan & Joshy Joseph Karakunnel & Vijay Victor, 2021. "India–European Union Trade Integration: An Analysis of Current and Future Trajectories," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 15(4), pages 484-504, November.
    2. Dragan Miljkovic & Rodney Paul, 2003. "Agricultural trade in North America: Trade creation, regionalism and regionalisation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(3), pages 349-366, September.
    3. Cosmas S. Mbogela, 2018. "Determinants of Africa - BRIC Countries Bilateral Trade Flows," Economy, Asian Online Journal Publishing Group, vol. 5(1), pages 40-53.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:rdevec:v:1:y:1997:i:2:p:153-170. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.