Consequences of the euro adoption by Central and Eastern European (CEE) countries for their trade flows

Andrzej Cieślik, Jan Michałek () and Jerzy Mycielski ()

No 118, NBP Working Papers from Narodowy Bank Polski

Abstract: In this paper we estimate the trade effects of the euro adoption in Central European countries using a modified gravity model. In particular, we analyze the ex post implications of accession of Slovenia and Slovakia to the Eurozone. We employ a gravity model that controls for an extended set of trade theory and policy variables. Trade theory variables include both the country size and factor proportion variables. Trade policy variables include the membership in GATT/WTO, CEFTA, OECD, EU and Europe Agreements. The gravity model is estimated using the panel data approach on a sample of CEE countries trading with the rest of the world during the period 1992-2010 using the fixed effects, random effects and Hausman-Taylor estimators. It seems that elimination of exchange rate volatility resulted in trade expansion for the CEE countries but the accession to the Eurozone did not have any significant effects on exports of Slovakia and Slovenia.

Keywords: Central and Eastern Europe; exports; euro zone (search for similar items in EconPapers)
JEL-codes: F14 F15 F33 F42 (search for similar items in EconPapers)
Pages: 39
Date: 2012
New Economics Papers: this item is included in nep-eec, nep-mon and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:nbp:nbpmis:118

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