Journal of Economics and Management  
  Volume 15, No. 2  
  August, 2019  
     
 

The Lasting Effects of Economic Integration Agreements on Trade

 
 
 
  Thi Hoang Oanh Nguyen  
 

Department of Economics, National Chung Cheng University, Taiwan

 
 
 
  Wei-Chih Chen  
  Department of Economics, National Chung Cheng University, Taiwan  



 

Abstract

 





This paper investigates the lasting effect of economic integration agreements (EIA) on trade flows after the agreement is terminated or member countries withdraw from it. Using bilateral trade data among 149 countries over the period 1962-2000, we find that the positive effect of EIAs on trade persists even after the agreement is terminated. This effect occurs mainly along the intensive margin. The lasting effect is stronger in the first few years after the EIA is terminated, and it gets weaker and becomes insignificant in the long run. Our findings are robust to various empirical model specifications and measurements of variables.


   

 

 

Keywords: economic integration agreements, extensive margin, intensive margin, panel data 

 

 

JEL classification: F1, F10, F15

 


 
   

 

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