Tibor Besedes, Georgia Institute of Technology: Trade Integration and the Fragility of Trade Relationships: Theory and Empirics
Department seminar. Tibor Besedes is an Associate Professor at the Georgia Institute of Technology. He will present a paper entitled "Trade Integration and the Fragility of Trade Relationships: Theory and Empirics", co-authored by Juan Moreno-Cruz and Volker Nitsch.
Tibor Besedes. Photo: Georgia Institute of Technology
We provide a theoretical framework to analyze the effects of economic integration agreements on the stability of trade relationships. We examine how the establishment of an economic integration agreement affects the value of trade at the start of a new trade relationship, the length of a trade relationship, and the growth of trade within a relationship. Our findings indicate an interesting dichotomy in the effect of an agreement on already active and new trade relationships: already active relationships become longer and grow more, while new relationships are shorter, grow less, and start with smaller values. Agreements increase entry of relationships.
Host: Yuan Zi