Moser C, Rose AK (2014)
Publication Language: English
Publication Type: Journal article
Publication year: 2014
Book Volume: Vol. 68
Pages Range: 31-47
DOI: 10.1016/j.euroecorev.2014.01.012
The consequences of regional trade agreements (RTAs) on countries׳ welfare are disputed. In this paper, we assess these effects using stock returns from a recent data set that spans over 200 RTA announcements, 80 economies, and 20 years. We measure the effects of news concerning RTAs on the returns of national stock markets, after adjusting these returns for international stock market movements. We then link these abnormal returns to features of the RTA members and the agreements themselves. We find strong evidence of the natural trading partner hypothesis; stock markets rise more when RTAs are signed between countries that already engage in high volumes of trade. Stock markets also rise more when poorer countries sign RTAs, and when RTAs are signed with smaller partners. We also find no evidence that capital markets expect significant trade diversion effects.
APA:
Moser, C., & Rose, A.K. (2014). Who Benefits from Regional Trade Agreements? European Economic Review, Vol. 68, 31-47. https://dx.doi.org/10.1016/j.euroecorev.2014.01.012
MLA:
Moser, Christoph, and Andrew K. Rose. "Who Benefits from Regional Trade Agreements?" European Economic Review Vol. 68 (2014): 31-47.
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