This paper examines spatial spillovers in the formation of preferential trade agreements (PTAs) through a new channel of institutional proximity. Our dependent variable is the status of PTAs between country attributes within a country-pair. The explanatory variable of interest is the status of PTAs in neighbouring country-pairs that share proximity in institutional development. We consider democracy and economic freedom as the main aspects of institutions, and use both as the fundamental components of institutional distance between country-pairs. Employing a spatial econometric method, we find strong evidence of the institutional interdependence of PTAs: country-pairs tend to influence each other's decision on the formation and the chosen type of PTAs (i.e., deep or shallow), such a neighbourhood effect increases with institutional proximity and is more prominent for the decisions on the type of PTAs. The institutional spatial channel is robust to various robustness checks.

中文翻译：

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贸易协定成员资格的空间溢出：机构邻近性重要吗？

本文研究了通过制度邻近的新渠道形成优惠贸易协定（PTA）时的空间溢出效应。我们的因变量是国家对内国家属性之间的优惠贸易协定的状态。感兴趣的解释变量是在制度发展方面相近的邻国对的特惠贸易协定的状况。我们认为民主和经济自由是制度的主要方面，并将两者作为国家间制度距离的基本组成部分。采用空间计量经济学方法，我们发现了优惠贸易协定制度相互依赖的有力证据：国家对往往会影响彼此对优惠贸易协定的形成和选择类型（即深层或浅层）的决定，这种邻里效应随着制度的建立而增强。邻近性，对于特惠贸易协定类型的决定更为突出。机构空间通道对于各种稳健性检查都是稳健的。