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The existing empirical literature has produced remarkably disparate results and the wide variety of empirical approaches reflects the uncertainty about the \u2018correct\u2019 set of explanatory variables that ought to be included in the analysis. To account for the model uncertainty that surrounds the validity of the competing PTA theories, we introduce Bayesian model averaging (BMA) to the PTA literature. Statistical theory shows that BMA successfully incorporates model uncertainty in linear regression analysis by minimizing the mean squared error, and by generating predictive distributions with optimal predictive performance. Once model uncertainty is addressed as part of the empirical strategy, we find strong evidence of trade creation, trade diversion, and open bloc effects. Our results are robust to a range of alternative empirical specifications proposed by the recent PTA literature. Copyright \u00a9 2010 John Wiley &amp; Sons, Ltd.<\/jats:p>","DOI":"10.1002\/jae.1198","type":"journal-article","created":{"date-parts":[[2010,6,24]],"date-time":"2010-06-24T08:15:40Z","timestamp":1277367340000},"page":"296-321","source":"Crossref","is-referenced-by-count":82,"title":["Trade creation and diversion revisited: Accounting for model uncertainty and natural trading partner effects"],"prefix":"10.1002","volume":"27","author":[{"given":"Theo S.","family":"Eicher","sequence":"first","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Christian","family":"Henn","sequence":"additional","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Chris","family":"Papageorgiou","sequence":"additional","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"311","published-online":{"date-parts":[[2012,2,16]]},"reference":[{"key":"e_1_2_7_2_1","first-page":"881","article-title":"The effect of the EEC and EFTA on European trade: a temporal cross\u2010section analysis","volume":"63","author":"Aitken ND","year":"1973","journal-title":"American Economic Review"},{"key":"e_1_2_7_3_1","doi-asserted-by":"publisher","DOI":"10.1111\/j.1468-5965.1973.tb00918.x"},{"key":"e_1_2_7_4_1","doi-asserted-by":"publisher","DOI":"10.1257\/000282803321455214"},{"key":"e_1_2_7_5_1","doi-asserted-by":"publisher","DOI":"10.1177\/1536867X0600600402"},{"key":"e_1_2_7_6_1","doi-asserted-by":"publisher","DOI":"10.1111\/j.1435-5597.1988.tb01155.x"},{"key":"e_1_2_7_7_1","unstructured":"BaierSL BergstrandJH.2002.On the endogeneity of international trade flows and free trade agreements. 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