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Disintegration and Trade

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Author Info
Jan Fidrmuc
Jarko Fidrmuc

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Abstract

The gravity model is used to assess the impact of disintegration on trade among the former constituent republics of three demised federations in central and eastern Europe: the Soviet Union, Yugoslavia, and Czechoslovakia. The authors find evidence of a very strong home bias around the time of disintegration, with trade exceeding normal trade intensity 24-fold (for Slovenia and Croatia) to 43-fold (the former Soviet Union and Czechoslovakia). Disintegration was followed by a sharp fall in trade intensity, although the legacy of a common past remains strong. By 1998, trade relations still exceeded the normal level 2-fold in the case of Slovenia and Croatia, 7-fold for the former Czechoslovakia, 13-fold for the Baltics, and 30-fold for Belarus, Russia, and Ukraine. Such trade intensities surpass the effects of formal preferential trade areas such as the EU or the impact of reunification on trade between East and West Germany. Copyright Blackwell Publishing Ltd 2003.

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Publisher Info
Article provided by Blackwell Publishing in its journal Review of International Economics.

Volume (Year): 11 (2003)
Issue (Month): 5 (November)
Pages: 811-829
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Handle: RePEc:bla:reviec:v:11:y:2003:i:5:p:811-829

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References listed on IDEAS
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  1. Maurice Obstfeld & Kenneth Rogoff, 2000. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," NBER Working Papers 7777, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Simon J. Evenett & Wolfgang Keller, 1998. "On Theories Explaining the Success of the Gravity Equation," NBER Working Papers 6529, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Djankov, Simeon & Freund, Caroline, 2000. "Disintegration," CEPR Discussion Papers 2545, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. Maurel, Mathilde & Cheikbossian, Guillaume, 1998. "The New Geography of Eastern European Trade," Kyklos, Blackwell Publishing, vol. 51(1), pages 45-71.
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  5. Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Tamim Bayoumi & Barry Eichengreen, 1995. "Is Regionalism Simply a Diversion? Evidence From the Evolution of the EC and EFTA," NBER Working Papers 5283, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Paul Grauwe & Frauke Skudelny, 2000. "The impact of EMU on trade flows," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(3), pages 381-402, 09. [Downloadable!] (restricted)
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  16. Elhanan Helpman & Paul Krugman, 1987. "Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 026258087x.
  17. Volker Nitsch, 2000. "National borders and international trade: evidence from the European Union," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 1091-1105, November. [Downloadable!] (restricted)
  18. repec:fth:michin:382 is not listed on IDEAS
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  20. Rose, Andrew K, 1999. "One Money, One Market: Estimating the Effect of Common Currencies on Trade," CEPR Discussion Papers 2329, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  21. Holger C. Wolf, 1997. "Patterns of Intra- and Inter-State Trade," NBER Working Papers 5939, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  22. Barry Eichengreen & Douglas A. Irwin, 1996. "The Role of History in Bilateral Trade Flows," NBER Working Papers 5565, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  23. Laszlo Matyas, 1997. "Proper Econometric Specification of the Gravity Model," The World Economy, Blackwell Publishing, vol. 20(3), pages 363-368, 05. [Downloadable!] (restricted)
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