EconPapers    
Economics at your fingertips  
 

How Far has Trade Integration Advanced? An analysis of actual and potential trade of three Central and Eastern European countries

Zoltán Jakab (), Mihály András Kovács () and András Oszlay
Additional contact information
Mihály András Kovács: Magyar Nemzeti Bank
András Oszlay: Magyar Nemzeti Bank (at the time of writing the study)

No 2000/1, MNB Working Papers from Magyar Nemzeti Bank (Central Bank of Hungary)

Abstract: This paper investigates the trade integration of three Central and Eastern European countries, namely the Czech Republic, Hungary and Poland, using the gravity model for trade as an analytical device. Beside the usual variables in such a model, we have also incorporated the FDI variables. According to our results, in the context of the most important Western European relations, it is Hungary that achieved the highest level of integration. Czech exports have also integrated, but there is still a very considerable potential there. Poland has integrated in exports to a much smaller extent than in imports. CEFTA-oriented trade has also gone up considerably, although the level of actual trade has not yet reached its full potential, except in the Czech Republic. Vis-a-vis South-East Asia, we have found overintegration for imports, but could see no signs of convergence for export towards this region. Our estimates support the trade-enhancing role of bilateral FDI. Paradoxically, the potential trade of the three countries estimated with FDI variables appears to be less than that suggested by the basic setup of the gravity model. We formulated two hypotheses to explain this, and supported one by a probit model. Finally, we tested for convergence and found that actual data indeed converged toward the estimated trade potential.

Pages: 58 pages
Date: 2000
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.mnb.hu/letoltes/wp2000-1.pdf (application/pdf)

Related works:
Journal Article: How Far Has Trade Integration Advanced?: An Analysis of the Actual and Potential Trade of Three Central and Eastern European Countries (2001) Downloads
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:mnb:wpaper:2000/1

Access Statistics for this paper

More papers in MNB Working Papers from Magyar Nemzeti Bank (Central Bank of Hungary) Contact information at EDIRC.
Bibliographic data for series maintained by Lorant Kaszab ().

 
Page updated 2021-04-28
Handle: RePEc:mnb:wpaper:2000/1