TRADE POTENTIAL IN AN ENLARGED EUROPEAN UNION: A RECENT APPROACH

Enrique Martínez-Galán, Maria Paula Fontoura and Isabel Maria Dias Proença ()
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Enrique Martínez-Galán: ISEG-UTL & Portuguese Ministry for Finance

International Trade from EconWPA

Abstract: This paper aims to evaluate the trade potential of manufactured products between the members of the EU25 in the threshold of its Eastern enlargement. We estimate, for 2002, a cross-section gravity model, whose coefficients will be used to project the “natural” trade relations between them. Relatively to previous evaluations of trade potential, we include in the gravity model a variable related to the countries’ complementarities in terms of their Commodity Composition of Trade and we opt for a Poisson Pseudo-Maximum Likelihood Estimator. The latter is confronted with the OLS estimator normally used in this type of models.

Keywords: European Union to 25 members; Trade Potential; Gravity Model; Poisson Pseudo-Maximum Likelihood Estimator; Commodities Composition of Trade in Manufactures. (search for similar items in EconPapers)
JEL-codes: C31 C51 C52 F14 F15 F17 (search for similar items in EconPapers)
Date: 2005-08-31
Note: Type of Document - pdf; pages: 31
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http://129.3.20.41/eps/it/papers/0508/0508011.pdf (application/pdf)

Related works:
Working Paper: Trade Potential in an Enlarged European Union: A Recent Approach (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpit:0508011

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