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The Role of Association Agreements within European Union Enlargement to Central and Eastern European Countries

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Author Info
Christophe Rault () (LEO, University of Orleans and IZA)
Robert Sova () (CES, Sorbonne University and A.S.E)
Ana Maria Sova () (CES, Sorbonne University and A.S.E)

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Abstract

The main goal of regionalization is the creation of free trade areas and the guarantee for countries to accede to a widened market. Many studies dealing with the effects of regional free trade agreements on trade flows already exist in the economic literature and the explosion in the number of regional agreements among countries has recently stressed the key role of regionalization. However, the effects of agreements on trade were sometimes contradictory in those studies. These diverging results can be explained by the potential endogeneity bias of the agreement variable. Our research in this paper aims at reassessing the genuine role of associations. For this matter, we particularly study the association of Central and Eastern European countries (CEEC) with European Union countries. Our econometric analysis based on qualitative choice models highlights in particular why European countries chose to conclude an association agreement with CEEC, and stresses the fact that European Union countries select endogenously the conclusion of association agreements. We are also particularly interested in modeling the effect of the association agreement on export performances between countries, and to quantify its impact. When considering annual data for 4 CEEC and 19 OECD countries (1990-2004), we find a 0.17 positive impact of the association agreement on bilateral exports.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2769.

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Length: 24 pages
Date of creation: Apr 2007
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Handle: RePEc:iza:izadps:dp2769

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Related research
Keywords: regionalization; European integration; qualitative choice models; gravity model;

Find related papers by JEL classification:
E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
F15 - International Economics - - Trade - - - Economic Integration
C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models

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References listed on IDEAS
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    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Caporale, Guglielmo Maria & Rault, Christophe & Sova, Ana Maria & Sova, Robert, 2008. "On the Bilateral Trade Effects of Free Trade Agreements between the EU-15 and the CEEC-4 Countries," IZA Discussion Papers 3782, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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