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Abstract

This paper analyzes the spatial interdependence of Free Trade Agreements (FTAs) in a cross-section framework using the Contagion Index proposed by Baldwin and Jaimovich (2010). A Bayesian heteroskedastic probit model is estimated, where a spatial lag is built based on the Contagion Index, finding evidence of interdependence related with a domino-like effect. I compare the results with simple probit estimations and other spatial specifications.

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