Trade Potential in an Enlarged European Union: A Recent Approach

Maria Paula Fontoura, Enrique Martinez-Galan () and Isabel Proença ()

No 2006/08, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: This paper aims to evaluate the trade potential of manufactured products between countries belonging to the EU in the threshold of its Eastern enlargement. For this purpose we use a Gravity model which is estimated with a Poisson Pseudo-Maximum Likelihood Method. We extend the specification of the gravity model in order to capture bilateral trade specificities between groups of countries of the enlarged EU, allowing to test the statistical significance of these inter-groups’ trade potential. In addition, it includes the Commodity Composition of Trade. The estimated coefficients are used to project exports of each country. We conclude that in 2002 the CEEC as a group had exhausted their export potentialities to the enlarged EU, whereas the same does not apply to its imports from the EU members.

Keywords: European Union; CEEC; Gravity Model; Commodity Composition of Trade; Poisson Pseudo-Maximum Likelihood Estimator; Trade Potential. (search for similar items in EconPapers)
JEL-codes: F14 F15 F17 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-eec and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: TRADE POTENTIAL IN AN ENLARGED EUROPEAN UNION: A RECENT APPROACH (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ise:isegwp:wp82006

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