Does regional trade integration reinforce or weaken capital mobility? New evidence from four free trade areas

Mehmed Ganic () and Novalic Amila ()
Additional contact information
Novalic Amila: International University of Sarajevo, Hrasnicka cesta 15, 71 000 Sarajevo, Bosnia and Herzegovina

Economics and Business Review, 2023, vol. 9, issue 3, 239-264

Abstract: The study aims to empirically determine whether a higher level of trade openness and the presence of better legal protection for investors enhances the impact of trade bloc membership on capital mobility based on four trading blocs: Eurasian Economic Union (EAEU), Central American and Dominican Republic Free Trade Agreement (CAFTADR), Central European Free Trade Agreement (CEFTA), and the Pacific Alliance. This study employs the fully modified and dynamic ordinary least squares estimators and a panel quantile regression cointegration estimator. The study finds that a country’s affiliation with a trade bloc improves capital mobility in the whole group and EAEU region, low capital mobility in the Pacific Alliance region and moderate low capital mobility in the CAFTA-DR region. The legal protection system alone provided for the investors does not improve the level of capital mobility unless its interaction with investment is included. Also the study reveals that high trade openness does not necessarily lead to better capital mobility for the studied trade blocs.

Keywords: regional integration; capital mobility; trading blocs; panel cointegration estimators (search for similar items in EconPapers)
JEL-codes: C23 F21 O55 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.18559/ebr.2023.3.795 (text/html)

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:vrs:ecobur:v:9:y:2023:i:3:p:239-264:n:8

DOI: 10.18559/ebr.2023.3.795

Access Statistics for this article

Economics and Business Review is currently edited by Tadeusz Kowalski

More articles in Economics and Business Review from Sciendo
Bibliographic data for series maintained by Peter Golla ().