The Endogeneity of Association Agreements and their Impact on Trade for Eastern Countries: Empirical Evidence for Romania

Christophe Rault, Ana Maria Sova () and Robert Sova ()

No wp868, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: The main goal of regionalization is the creation of free trade areas and the guarantee for countries to accede to a widened market. Many studies dealing with the effects of regional free trade agreements on trade flows already exist in the economic literature and the explosion of regional agreements among nations has recently stressed the key role of regionalization. However, the effects of agreements on trade have not yet been clearly determined in those studies. Our research in this paper aims at reassessing the genuine role of associations. For this matter, we particularly study the association of Romania with European Union countries. Our econometric analysis based on qualitative choice models highlights in particular why European countries chose to conclude an association agreement with Romania, and stresses the fact that European Union countries select endogenously the conclusion of association agreements. We also find a 0.29 positive impact of the association agreement on Romanian export performances.

Keywords: Regionalization; European integration; Qualitative choice models; Probit (search for similar items in EconPapers)
JEL-codes: C25 E61 F13 F15 (search for similar items in EconPapers)
Pages: pages
Date: 2007-04-01
New Economics Papers: this item is included in nep-eec, nep-int and nep-tra
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Citations: View citations in EconPapers (3)

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