Hub-and-Spokes Free-Trade Agreements in the Presence of Technology Spillovers: An Application to the Western Hemisphere

摘要

This paper compares the economic effects of a hub-and-spokes (HAS) type of bilateral trade configuration (with Chile being the hub) with those of a more comprehensive regional FTA (namely, the FTAA). The model is augmented to account for the possibility of technology spillovers and its effective assimilation among participating economies. In particular, absorptive capacity, governance factor, proximity and socio-institutional congruence conjointly determine an economys capacity to capture the technology that is transmitted from developed spoke US to other regions.