Expanding RTAs, Trade Flows, and the Multinational Enterprise

We test the relationship between the size of regional trade agreements (RTAs) and openness by using a gravity equation with multilateral trade factors. Our sample includes 11 RTAs, seven with constant membership and four with expanding membership. Regional trade bias declines with the size of the cl...

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Veröffentlicht in:	Journal of international business studies 2009-09, Vol.40 (7), p.1206-1227
Hauptverfasser:	Fratianni, Michele, Oh, Chang Hoon
Format:	Artikel
Sprache:	eng
Schlagworte:	Bilateralism Business and Management Business Strategy/Leadership Business studies Countries Economic growth Economic theory Expansion Foreign investment Free trade GDP Gross Domestic Product Imports International International Business International economics International trade Liberalization Management Multilateral trade Multinational corporations Multinational enterprises Organization Organizational effectiveness Regional integration Regional trade pacts Regionalization Studies Tariffs Trade agreements Trade blocs Trade development Trade flows Trade regionalization
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Beschreibung
Zusammenfassung:	We test the relationship between the size of regional trade agreements (RTAs) and openness by using a gravity equation with multilateral trade factors. Our sample includes 11 RTAs, seven with constant membership and four with expanding membership. Regional trade bias declines with the size of the club; three of the four expanding RTAs have already surpassed their "optimal" size. We also explore the link between openness of the RTA and the geographic strategy of the multinational enterprise. We find strong evidence in favor of the regionalization strategy, which has been enhanced by the presence of RTAs.
ISSN:	0047-2506 1478-6990
DOI:	10.1057/jibs.2009.8