중남미

Not only economic factors and geographical distance but also socio-political proximity may be important determinants of forming regional trade agreements (RTAs). This paper empirically analyzes whether the socio-political factors and political ties have significant influences on the formation of RTAs. Cultural proximity is measured by the cultural indices such as language and religion, and political ties are measured by existence of military alliance and level of democracy. This paper applies qualitative choice model estimation techniques (pooled Probit model with cluster-robust standard errors) to panel data covering bilateral country-pairs among 195 countries between 1995 and 2010. Futhermore, we estimate the probability of forming Korea-Mercosur FTA as an application. We find that the RTA formation has been strongly and significantly driven by deepening socio-political linkages between members. Based on these empirical results, we also find that the likelihood of forming Korea-Mercosur FTA is significantly low.