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Trade Specialisation and Economic Convergence: Evidence from Two Eastern European Countries

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  • Guglielmo Maria Caporale
  • Christophe Rault
  • Robert Sova
  • Anamaria Sova

Abstract

This paper analyses trade specialisation dynamics in two Eastern European countries (Romania and Bulgaria - EEC-2) vis-à-vis the core EU member states (EU-15) over the period 1990-2006. Specifically, we focus on whether there is a shift towards intra-industry trade leading to economic convergence and technological catch-up. We use recently developed static (FEM, REM and FEVD) and dynamic (GMM) panel data methods which take into account possible heterogeneity. Our empirical results indicate that intra-industry trade has indeed increased, but it is of the vertical rather than the horizontal type, resulting in complementary rather than competitive production patterns.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.96866.de/dp875.pdf
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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 875.

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Length: 27 p.
Date of creation: 2009
Date of revision:
Handle: RePEc:diw:diwwpp:dp875

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Keywords: Gravity models; panel data models; trade specialisation; comparative advantage;

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References

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  17. Kaitila, Ville & WidgrÉn, Mika, 1999. "Revealed Comparative Advantage in Trade between the European Union and the Baltic States," Discussion Papers 697, The Research Institute of the Finnish Economy.
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Cited by:
  1. Eleonora Cavallaro & Piero Esposito & Alessia Matano & Marcella Mulino, 2012. "Technological catching up, quality of exports and competitiveness: a sectoral perspective," Working Papers 158, University of Rome La Sapienza, Department of Public Economics.
  2. Dumitru Miron & Alina Mihaela Dima & Simona Vasilache, 2010. "Models Of The Intra-Regional Trade Influence On Economic Sustainable Development In Romania," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 12(27), pages 27-35, February.
  3. Marius-Razvan Surugiu & Camelia Surugiu, 2012. "Intra-industry trade in Romania: analysis of the automobile parts and accessories sector," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 166-179.

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