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The Contribution of Intra-Regional and Extra-Regional Trade to Growth: Evidence from the European Union

Rossitza Wooster () and Smile Dube ()
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Smile Dube: California State University, Sacramento, Postal: Dept. of Economics California State, University Sacramento Sacramento, CA 95819-6082

Journal of Economic Integration, 2008, vol. 23, 161-182


In this paper, we assess whether trade among member countries of a regional trade agreement (intra-regional trade) contributes more to output growth than trade with nonmember countries (extra-regional trade). We use Granger causality tests to evaluate the trade-growth relationship in 13 countries from the European Union and separately estimate the differential impact of the two kinds of trade on economic growth over the period 1980-2003. In addition to the basic influences of investment and population growth, we find that intra-regional trade has had a lesser impact on growth in output per capita than extra-regional trade by almost 30%.

Keywords: Regional Integration; Trade Patterns; Economic Growth of Open Economies (search for similar items in EconPapers)
JEL-codes: C33 F13 F43 (search for similar items in EconPapers)
Date: 2008
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