Abstract: Free Trade Agreements (FTA) have proliferated globally since the mid-1990s. This paper aims to analyze the formation mechanism of global FTA network based on the complex network science. Firstly, a network structure is set up by the relevant statistical data and the network statistical properties are analyzed. Secondly, by the econometric analysis of panel logit model, it is found that, in addition to traditional geographic and economic determinants, FTA network properties have important impact on the formation and evolution of FTA. Thirdly, models are revised by adding institution, culture and history determinants, and it is proved that the findings are very robust to various econometric specifications. Finally, conclusions and implication for China are provided.
Keywords: Free Trade Agreement, Discrete Choice Model, Hub & Spoke Structure, Complex Network
source:Finance & Trade Economics ,No9,2013