Global production sharing and trade effects: an analysis of Eurasian Economic Union

Sanjeev Vasudevan () and M. Suresh Babu ()
Additional contact information
Sanjeev Vasudevan: Indian Institute of Technology Madras
M. Suresh Babu: Indian Institute of Technology Madras

Eurasian Economic Review, 2021, vol. 11, issue 4, No 4, 633-665

Abstract: Abstract This study examines the trade effects of the Eurasian Economic Union on global production sharing. We use a panel dataset of bilateral exports of intermediate goods, parts and components and final assembly for 12 Eurasian countries with 28 partners for 2000–18. We estimate a gravity model using the Poisson Pseudo Maximum Likelihood method to mitigate zero trade values and heteroskedasticity issues. Our analysis provides new empirical evidence on significant net trade creation effects of 111% in intermediate goods exports due to EAEU formation. Our findings also highlight that a substantial share of the increase in intermediate goods exports originates from trade creation in final assembly exports while parts and components show net trade diversion effects. Further, a country-level analysis reveals that the trade effects of EAEU are heterogeneous across all the members, with Armenia and the Russian Federation benefiting the most and the Kyrgyz Republic benefiting the least from the EAEU formation. Our study has important policy implications on promoting production sharing in the Eurasian region and hence remains of interest to policymakers.

Keywords: Eurasian economic union; Trade effects; Global production sharing; Parts and components trade; Gravity model; Poisson pseudo maximum likelihood (search for similar items in EconPapers)
JEL-codes: F10 F14 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s40822-021-00179-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:eurase:v:11:y:2021:i:4:d:10.1007_s40822-021-00179-0

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40822

DOI: 10.1007/s40822-021-00179-0

Access Statistics for this article

Eurasian Economic Review is currently edited by Dorothea Schäfer

More articles in Eurasian Economic Review from Springer, Eurasia Business and Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().