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Disintegration

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  • Djankov, Simeon
  • Freund, Caroline

Abstract

We study the effects of trade barriers and the persistence of past linkages on trade flows in the former Soviet Union (FSU). Estimating a gravity equation on 1987-1996 trade among and between nine Russian regions and fourteen FSU republics, we find that Russian regions traded 60 percent more with each other than with republics in the reform period (1994-1995). In contrast, they did not trade significantly more with each other than with republics in the reform period (1994-96). In contrast, they did not trade significantly more with each other than with republics in the pre-reform period (1987-90). Our results suggest that the bias towards domestic trade in the reform period is primarily a result of tariffs. We also find that past linkages, such as infrastructure, production and consumption chains, and business networks, have limited the reorientation of trade.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2545.

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Date of creation: Aug 2000
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Handle: RePEc:cpr:ceprdp:2545

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Keywords: Disintegration; Former Soviet Union;

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  1. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
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  3. Hummels, D. & Levinsohn, J., 1993. "Monopolistic Competition and International Trade: Reconsidering the Evidence," Working Papers 339, Research Seminar in International Economics, University of Michigan.
  4. John F. Helliwell, 1996. "Do National Borders Matter for Quebec's Trade?," Canadian Journal of Economics, Canadian Economics Association, vol. 29(3), pages 507-22, August.
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  6. Dixit, Avinash K, 1989. "Hysteresis, Import Penetration, and Exchange Rate Pass-Through," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 205-28, May.
  7. Charles Engel & John H. Rogers, 1994. "How Wide is the Border?," NBER Working Papers 4829, National Bureau of Economic Research, Inc.
  8. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September.
  9. Olivier Blanchard & Michael Kremer, 1997. "Disorganization," William Davidson Institute Working Papers Series 38, William Davidson Institute at the University of Michigan.
  10. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  11. 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.
  12. Frankel, Jeffrey & Stein, Ernesto & Wei, Shang-jin, 1995. "Trading blocs and the Americas: The natural, the unnatural, and the super-natural," Journal of Development Economics, Elsevier, vol. 47(1), pages 61-95, June.
  13. Richard Baldwin, 1988. "Hysteresis In Import Prices: The Beachhead Effect," NBER Working Papers 2545, National Bureau of Economic Research, Inc.
  14. Caroline L. Freund, 1998. "Regionalism and permanent diversion," International Finance Discussion Papers 602, Board of Governors of the Federal Reserve System (U.S.).
  15. Jeffrey A. Frankel, 1998. "The Regionalization of the World Economy," NBER Books, National Bureau of Economic Research, Inc, number fran98-1.
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Citations

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Cited by:
  1. Jarko Fidrmuc & Jan Fidrmuc, 2001. "Disintegration and Trade," LICOS Discussion Papers 9901, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  2. Pauline Grosjean & Claudia Senik, 2007. "Should market liberalization precede democracy? Causal relations between political preferences and development," PSE Working Papers halshs-00588060, HAL.
  3. Yener Kandogan, 1999. "Lingering effects of central planning on trade? Evidence from current CIS trade patterns," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(3), pages 501-521, September.
  4. Pomfret, Richard, 2007. "Coordinating Aid for Regional Cooperation Projects: The Experience of Central Asia," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  5. Tiiu Paas & Egle Tafenau, 2004. "The Baltic Sea Region’s Role in Trade Integration," University of Tartu - Faculty of Economics and Business Administration, in: Modelling the Economies of the Baltic Sea Region, volume 17, chapter 3, pages 92-115 Faculty of Economics and Business Administration, University of Tartu (Estonia).
  6. Pomfret, Richard, 2005. "Trade policies in Central Asia after EU enlargement and before Russian WTO accession: Regionalism and integration into the world economy," Economic Systems, Elsevier, vol. 29(1), pages 32-58, March.
  7. Claus-Friedrich Laaser & Klaus Schrader, 2002. "European Integration and Changing Trade Patterns: The Case of the Baltic States," Kiel Working Papers 1088, Kiel Institute for the World Economy.
  8. Yener Kandogan, 2006. "Falling Walls and Lifting Curtains: Analysis of Border Effects in Transition Countries," William Davidson Institute Working Papers Series 821, William Davidson Institute at the University of Michigan.

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