Southeastern European Trade Analysis: A Role for Endogenous CEFTA-2006?
AbstractThe objective of this paper is to analyze the impact the Central European Free Trade Agreement of 2006 (CEFTA-2006) has had on trade and provide quantitative comparison with the original CEFTA and with trade liberalization under the EU integration process. The paper belongs to the strand of literature analyzing a free trade agreement in a gravity framework but treating the agreement as being potentially endogenous. The empirical evidence suggests that CEFTA-2006 exerted a positive, significant, and large effect on trade in Southeast Europe. This finding can be largely attributed to the distracted trade flows in the region over the 1990s. The effect of CEFTA-2006 has been estimated to be larger than the effect of the stabilization and association agreements. This counteracts the concern that the EU and the Southeastern European countries formed a "hub-and-spoke" structure in terms of trade.
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Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Emerging Markets Finance and Trade.
Volume (Year): 49 (2013)
Issue (Month): 5 (September)
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Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=111024
CEFTA-2006; stabilization and association agreements; trade agreements' endogeneity;
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