Dissecting the trade effects of Europe’s economic integration agreements

Sophie Soete and Jan Van Hove

No 490242, Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: This paper is the first to systematically study the trade effects of economic integration agreements (EIAs) between the European Union - the driving force behind the recent explosion of EIAs - and third countries. We quantify ex post the effects of these agreements through a gravity model using panel data on aggregate imports and exports for the period 1988-2011. We extend the literature in several ways. First, we include leads and lags to control for medium and long term anticipatory and reaction effects of EIAs. Both effects appear to be important to capture the true impact of EIAs. Second, we extensively analyze potential heterogeneous effects of various EIAs. We find that EIAs have very heterogeneous effects on trade flows. Third, we also estimate the effects of EIAs on trade flows separately for each European country. Contrary to our expectations, we find that EIAs have a rather homogeneous impact on the 27 European countries.

Date: 2014-09
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Published in Working paper n°18

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Related works:
Journal Article: Dissecting the Trade Effects of Europe’s Economic Integration Agreements (2017)
Working Paper: Dissecting the trade effects of Europe's economic integration agreements (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:490242

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