The happy few: cross-country evidence of the euro effect on trade
Rafael Llorca-Vivero and
José Antonio Martínez-Serrano
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Rafael Llorca-Vivero: Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).
José Antonio Martínez-Serrano: Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).
No 1803, Working Papers from Department of Applied Economics II, Universidad de Valencia
This paper investigates the EMU effect on trade by member country and direction of trade flows. The empirical analysis uses a recent econometric development, which allows us the estimation of gravity equations dealing with heteroskedastic residuals and zero bilateral trade flows on a large span of data (across both countries and periods). Our results, robust to using alternative samples and EU time-trends, suggest that, while there is no evidence of an aggregate EMU effect, some few countries have benefited from sharing the euro. In particular, for Spain and Portugal, this is the case for both exports and import flows. By contrast, the EMU has had a negative effect on import flows in the Netherlands and Malta, while we find a negative impact for exports from Greece.
Keywords: EMU; exports; imports; HDFE PPML; gravity equation. (search for similar items in EconPapers)
JEL-codes: F14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:eec:wpaper:1803
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