Broad versus regional integration: what matters more for economic development?

In this paper, we examine the impacts of broad and regional integration on long-run economic development.We construct cross-country measures of regional integration that account for both the magnitude and the endogeneity of individual regional integration agreements. We then include our regional integration measures along with the broad trade share, institutions and geography in a deep determinants regression. Our results show that regional integration, unlike broad trade, can raise the long-run level of real gross domestic product (GDP) per capita.