On the Bilateral Trade Effects of Free Trade Agreements between the EU-15 and the CEEC-4 Countries

Guglielmo Maria Caporale, Christophe Rault, Robert Sova () and Ana Maria Sova
Authors registered in the RePEc Author Service: Anamaria Diana Sova

No 2419, CESifo Working Paper Series from CESifo

Abstract: The expansion of regionalism has spawned an extensive theoretical literature analysing the effects of Free Trade Agreements (FTAs) on trade flows. In this paper we focus on FTAs (also called European agreements) between the European Union (EU-15) and the Central and Eastern European countries (CEEC-4, i.e. Bulgaria, Hungary, Poland and Romania ) and model their effects on trade flows by treating the agreement variable as endogenous. Our theoretical framework is the gravity model, and the econometric method used to isolate and eliminate the potential endogeneity bias of the agreement variable is the fixed effect vector decomposition (FEVD) technique. Our estimation results indicate a positive and significant impact of FTAs on trade flows. This finding is robust to the inclusion in the sample of a group of control countries (specifically Belarus, the Russian Federation and Ukraine) that did not sign an FTA. Besides, we show that trade growth after the FTA agreement with the EU was signed exceeded trade growth of the control group of countries which did not become members.

Keywords: regionalisation; European integration; panel data methods (search for similar items in EconPapers)
JEL-codes: C25 E61 F13 F15 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp2419.pdf (application/pdf)

Related works:
Journal Article: On the bilateral trade effects of free trade agreements between the EU-15 and the CEEC-4 countries (2009)
Journal Article: On the bilateral trade effects of free trade agreements between the EU-15 and the CEEC-4 countries (2009)
Working Paper: On the Bilateral Trade Effects of Free Trade Agreements between the EU-15 and the CEEC-4 Countries (2008)
Working Paper: On the Bilateral Trade Effects of Free Trade Agreements between the EU-15 and the CEEC-4 Countries (2008)
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:ces:ceswps:_2419

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().