Europe Agreements and Trade Balance: Evidence from Four New EU Members

Guglielmo Maria Caporale, Christophe Rault, Robert Sova () and Anamaria Sova

No 3340, CESifo Working Paper Series from CESifo

Abstract: This paper analyses the trade balance effects of Europe agreements (EA) between the EU-15 and four new EU members from Central and Eastern Europe (CEEC-4) using both static and dynamic panel data approaches. Specifically, the system Generalized Method of Moments (GMM, Blundell and Bond, 1998) and recently developed econometric methods such as the Correlated Common Estimation Pooled - Hausman-Taylor (CCEPHT, Serlenga and Shin, 2007) are applied to analyse the effects of the agreement variable. Our estimation results indicate a positive and significant impact of EA on trade flows. However, there is an asymmetric impact of the agreement variable on the trade balance, exports and imports being affected in different ways, which results in a trade balance deficit in the CEEC-4.

Keywords: regionalisation; trade flows; trade balance; panel data methods (search for similar items in EconPapers)
JEL-codes: C25 E61 F13 F15 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (3)

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Working Paper: Europe Agreements and Trade Balance: Evidence form Four New EU Members (2011)
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