TRADE SPECIALISATION AND ECONOMIC CONVERGENCE: EVIDENCE FROM TWO EASTERN EUROPEAN COUNTRIES

Christophe Rault (), Guglielmo Maria Caporale, Robert Aurelian Sova () and Anamaria Diana Sova

No wp959, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: This paper analyses trade specialisation dynamics in two Eastern European countries (Romania and Bulgaria - EEC-2) vis-à-vis the core EU member states (EU-15) over the period 1990-2006. Specifically, we focus on whether there is a shift towards intra-industry trade leading to economic convergence and technological catch-up. We use recently developed static (FEM, REM and FEVD) and dynamic (GMM) panel data methods which take into account possible heterogeneity. Our empirical results indicate that intra-industry trade has indeed increased, but it is of the vertical rather than the horizontal type, resulting in complementary rather than competitive production patterns.

Keywords: gravity models; panel data models; trade specialisation; comparative advantage (search for similar items in EconPapers)
JEL-codes: F13 F15 C23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-tra
Date: 2009-06-01
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http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp959.pdf

Related works:
Working Paper: Trade Specialisation and Economic Convergence: Evidence from two Eastern European Countries (2011)
Working Paper: Trade Specialisation and Economic Convergence: Evidence from Two Eastern European Countries (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:wdi:papers:2009-959

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