Trade Prospects of the New EU Neighborhood Policy: Evidence from Hausman and Taylor's Models

Nicolas Peridy ()

Global Economy Journal, 2005, vol. 5, issue 1, 27

Abstract: One major objective of the new EU neighborhood policy is to move towards more trade integration between the enlarged EU and its new Eastern and Southern neighbors, i.e., Russia, Ukraine, Belarus, Moldova, as well as Southern Mediterranean and Caucasus countries. Using recent theoretical developments in gravity models, this paper derives an estimable equation, which particularly focuses on trade costs. This equation is then used to investigate the new neighbors' export potential towards the EU market. For this purpose, several Hausman and Taylor's models are implemented in order to consider the correlation between certain independent variables and the residuals which are used to calculate trade potentials. Results outline that the NNCs' export potential is generally significant, especially for the new Eastern neighbors. However, it seems that this potential is limited for Mediterranean countries, as they have already enjoyed preferential market access with regards to the EU. Finally, an extension of the analysis to Middle-East and Gulf countries also highlights significant trade potentials with the EU.

Keywords: Trade potential; Hausman and Taylor; gravity models; European Union; Mediterranean countries; Eastern European countries. (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://doi.org/10.2202/1524-5861.1048 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:glecon:v:5:y:2005:i:1:n:7

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/gej/html

DOI: 10.2202/1524-5861.1048

Access Statistics for this article

Global Economy Journal is currently edited by Jannett Highfill

More articles in Global Economy Journal from De Gruyter
Bibliographic data for series maintained by Peter Golla ().