In a three-country model of endogenous trade agreements, we study the implications of the Most Favored Nation Clause (MFN) when countries are free to form discriminatory preferential trade agreements (PTAs). While PTA members discriminate against non-member countries, MFN requires non-members to...

We show that multilateral tariff binding liberalization substantially impacts the nature and extent of Preferential Trade Agreement (PTA) formation. First, it shapes the nature of forces constraining expansion of Free Trade Agreements (FTAs). The constraining force is a free riding incentive of...

Following the failure of multilateral trade negotiations at the Cancun meeting and the Doha Round, developing countries have pursued an alternative in so-called "south-south" trade agreements. Since these agreements lead to trade diversion from efficient north (developed) countries to less...

We conduct a welfare comparison of MFN and tariff discrimination in an oligopoly model of trade between two exporting countries and one importing country. While MFN dominates tariff discrimination from a world welfare perspective when exporting countries are asymmetric with respect to either...

This paper uses an endogenous merger formation approach in a concentrated international oligopoly to examine the effects of trade liberalization on the nature of merger incentives (national vs. international). The effects of unilateral trade liberalization on a country's industry structure are...

This paper calculates Theil’s entropy index to measure the extent of productivity differences across 92 countries for the period from 1970 to 2003. While there is evidence of increasing differences in productivity across these countries, we observe different patterns when we group the...