This paper demonstrates how regional trade agreements (RTAs) can lead to both foreign direct investment creation and diversion effects. These two effects, in return, impact the enogenous formation of RTAs. The investment creation effect results from foreign forms' ability to serve a larger...

Developed countries maintain special tari preferences, namely the Generalized System of Preferences (GSP), for imports from developing countries. Critics have highlighted the underachieving nature of such preferences, but developing countries continue to place GSP at the heart of the their...