Behar, AlbertoCirera i Criville, Laia2012-03-192012-03-192011-04-01https://hdl.handle.net/10986/3392Free trade agreements lead to a rise in bilateral trade regardless of whether the signatories are developed or developing countries. Furthermore, the percentage increase in bilateral trade is higher for South-South agreements than for North-South agreements. In this paper, the results are robust across a number of gravity model specifications in which the analysis controls for the endogeneity of free trade agreements (with bilateral fixed effects) and also takes account of multilateral resistance in both estimation (with country-time fixed effects) and comparative statics (analytically). The analytical model shows that multilateral resistance dampens the impact of free trade agreements on trade by less in South-South agreements than in North-South agreements, which accentuates the difference implied by the gravity model coefficients, and that this difference gets larger as the number of signatories rises. For example, allowing for lags and multilateral resistance, a four-country North-South agreement raises bilateral trade by 53 percent while the analogous South-South impact is 107 percent.CC BY 3.0 IGOABSOLUTE VALUEAGGREGATE TRADEAGRICULTUREBARRIERS TO IMPORTSBILATERAL TRADEBLOC TRADEBUSINESS ENVIRONMENTCHANGES IN TRADECOMMODITIESCOMMODITYCOMMON MARKETCOMPARATIVE ADVANTAGECOMPETITION FRAMEWORKCOMPETITION POLICYCONSUMERSCOST REDUCTIONSCOUNTRY DUMMIESCURRENCYCURRENCY UNIONCUSTOMSCUSTOMS UNIONCUSTOMS UNIONSDATE OF ENTRY INTO FORCEDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDEVELOPMENT STRATEGIESECONOMETRIC ANALYSISECONOMIC GEOGRAPHYECONOMIC INTEGRATIONECONOMIC REFORMECONOMIC RELATIONSECONOMIC SIZEECONOMIC THEORYECONOMICS RESEARCHECONOMIES OF SCALEELASTICITYELASTICITY OF SUBSTITUTIONEUROPEAN UNIONEXCHANGE RATEEXCHANGE RATE REGIMESEXCHANGE RATESEXPORTSEXTERNAL TARIFFEXTERNAL TARIFFSFACTOR ENDOWMENTSFEDERAL RESERVEFEDERAL RESERVE BANKFINANCIAL SUPPORTFLEXIBLE EXCHANGE RATESFREE TRADEFREE TRADE AGREEMENTFREE TRADE AGREEMENTSFREE TRADE AREAFREE TRADE AREASFREE TRADE ASSOCIATIONFREE TRADE ZONESFUTURE RESEARCHGDPGLOBAL ECONOMIC PROSPECTSGLOBAL ECONOMYGLOBAL MARKETGLOBAL TRADEGRAVITY EQUATIONGRAVITY MODELGRAVITY MODELSHARMONIZATIONIMPACT OF TRADEINEQUALITYINTELLECTUAL PROPERTYINTELLECTUAL PROPERTY RIGHTSINTERNAL TRADEINTERNATIONAL BANKINTERNATIONAL ECONOMICSINTERNATIONAL TRADELIBERALIZATIONSLOW-INCOME COUNTRIESMARKET ACCESSMATURE MARKETSMIDDLE-INCOME COUNTRIESMULTILATERAL TRADEMULTILATERAL TRADE LIBERALIZATIONMULTIPLIERSNATIONAL INCOMEOPPORTUNITY COSTOUTPUTPARTICULAR COUNTRIESPOLICY RESEARCHPOLITICAL ECONOMYPOTENTIAL BENEFITSPREFERENTIAL AGREEMENTSPREFERENTIAL TRADEPREFERENTIAL TRADE AGREEMENTPREFERENTIAL TRADE AGREEMENTSPREFERENTIAL TRADING ARRANGEMENTSPROTECTIONISTREAL GDPRED TAPEREGIONAL AGREEMENTSREGIONAL INTEGRATIONREGIONAL TRADEREGIONAL TRADE AGREEMENTSREGIONAL TRADE ARRANGEMENTSREGIONALISMREGIONALIZATIONRESTRICTIVE RULES OF ORIGINSIGNATORY COUNTRIESTARIFF SCHEDULESTECHNOLOGY TRANSFERTOTAL FACTOR PRODUCTIVITYTRADE AGREEMENTTRADE AGREEMENTSTRADE BARRIERTRADE BARRIERSTRADE CONCESSIONSTRADE COSTSTRADE CREATIONTRADE DIVERSIONTRADE EFFECTSTRADE FACILITATIONTRADE FLOWSTRADE INTEGRATIONTRADE LIBERALIZATIONTRADE MORETRADE PARTNERSTRADE POLICYTRADE POLICY REFORMSTRADE VOLUMETRADE VOLUMESTRADING BLOCSTRADING SYSTEMTRANSFER OF TECHNOLOGYTRANSPORT COSTSUTILITY FUNCTIONVOLUME OF TRADEWELFARE GAINSWORLD DEVELOPMENT INDICATORSWORLD ECONOMYWORLD TRADEWORLD TRADE ORGANIZATIONWorld Bankhttps://doi.org/10.1596/1813-9450-5626