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European Integration and Changing Trade Patterns: The Case of the Baltic States

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  • Claus-Friedrich Laaser
  • Klaus Schrader
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    Abstract

    The analysis of Baltic regional trade patterns reveals that during the nineties the Baltic states made significant progress to integrate into the Western European division of labour although a significant share of (transit) trade with Russia remained. In view of this development, history seems to matter with respect to the interwar period and the period of Soviet occupation. In addition, a trade entropy analysis and gravity model estimates show that European integration of the Baltic states has a regional centre of gravity located in the Baltic Sea region. The Baltic trade flows increasingly follow the gravitational forces that generally shape trade relations, while regional integration is still much more important than it is normally the case.

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    File URL: https://www.econstor.eu/dspace/bitstream/10419/2690/1/kap1088.pdf
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    Bibliographic Info

    Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1088.

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    Length: 51 pages
    Date of creation: Jan 2002
    Date of revision:
    Handle: RePEc:kie:kieliw:1088

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    Related research

    Keywords: Eastern enlargement; regional integration; gravity model; Baltic trade patterns;

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    References

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    1. Jarko Fidrmuc & Jan Fidrmuc, 2001. "Disintegration and Trade," LICOS Discussion Papers 9901, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    2. Baldwin, Richard, 1988. "Hyteresis in Import Prices: The Beachhead Effect," American Economic Review, American Economic Association, vol. 78(4), pages 773-85, September.
    3. Richard Baldwin, 1989. "Sunk-Cost Hysteresis," NBER Working Papers 2911, National Bureau of Economic Research, Inc.
    4. Tamim Bayoumi & Barry J. Eichengreen, 1995. "Is Regionalism Simply a Diversion? Evidence from the Evolution of the EC and EFTA," IMF Working Papers 95/109, International Monetary Fund.
    5. Soloaga, Isidro & Winters, L. Alan, 1999. "Regionalism in the Nineties: What Effect on Trade?," CEPR Discussion Papers 2183, C.E.P.R. Discussion Papers.
    6. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
    7. Bhagwati, Jagdish & Panagariya, Arvind, 1996. "The Theory of Preferential Trade Agreements: Historical Evolution and Current Trends," American Economic Review, American Economic Association, vol. 86(2), pages 82-87, May.
    8. Hamilton, C.B. & Winters, L.A., 1992. "Opening Up International Trade in Eastern Europe," Papers 511, Stockholm - International Economic Studies.
    9. Krieger-Boden, Christiane, 1995. "Die räumliche Dimension in der Wirtschaftstheorie: Ältere und neuere Erklärungsansätze," Open Access Publications from Kiel Institute for the World Economy 832, Kiel Institute for the World Economy (IfW).
    10. Jeffrey A. Frankel & Andrew K. Rose, 2000. "Estimating the Effect of Currency Unions on Trade and Output," NBER Working Papers 7857, National Bureau of Economic Research, Inc.
    11. Laaser, Claus-Friedrich & Schrader, Klaus, 1992. "Zur Reintegration der baltischen Staaten in die Weltwirtschaft," Open Access Publications from Kiel Institute for the World Economy 1526, Kiel Institute for the World Economy (IfW).
    12. Deardoff, A.V., 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," Working Papers 382, Research Seminar in International Economics, University of Michigan.
    13. Deardorff, A.V., 1995. "Determinants of Bilateral Trade : Does Gravity Work in a Neoclassical World?," Papers 95-05, Michigan - Center for Research on Economic & Social Theory.
    14. 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.
    15. Simeon Djankov & Caroline Freund, 1998. "Disintegration," International Finance Discussion Papers 618, Board of Governors of the Federal Reserve System (U.S.).
    16. Böhme, Hans & Laaser, Claus-Friedrich & Sichelschmidt, Henning & Soltwedel, Rüdiger, 1998. "Transport in the Baltic Sea region: Perspectives for the economies in transition," Open Access Publications from Kiel Institute for the World Economy 1291, Kiel Institute for the World Economy (IfW).
    17. Barry Eichengreen & Douglas A. Irwin, 1998. "The Role of History in Bilateral Trade Flows," NBER Chapters, in: The Regionalization of the World Economy, pages 33-62 National Bureau of Economic Research, Inc.
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    19. Baldwin, Richard & Krugman, Paul, 1989. "Persistent Trade Effects of Large Exchange Rate Shocks," The Quarterly Journal of Economics, MIT Press, vol. 104(4), pages 635-54, November.
    20. repec:fth:michin:382 is not listed on IDEAS
    21. Schrader, Klaus & Laaser, Claus-Friedrich, 1994. "Die baltischen Staaten auf dem Weg nach Europa : Lehren aus der Süderweiterung der EG," Open Access Publications from Kiel Institute for the World Economy 819, Kiel Institute for the World Economy (IfW).
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    Cited by:
    1. Luca De Benedictis & Roberta De Santis & Claudio Vicarelli, 2005. "Hub-and-Spoke or else? Free trade agreements in the “enlarged” European Union," ISAE Working Papers 52, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
    2. Julia Spies & Helena Marques, 2006. "Trade Effects of the Europe Agreements," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 274/2006, Department of Economics, University of Hohenheim, Germany.
    3. Paas, Tiiu & Tafenau, Egle, 2005. "European trade integration in the Baltic Sea Region - A gravity model based analysis," HWWA Discussion Papers 331, Hamburg Institute of International Economics (HWWA).
    4. Laaser, Claus-Friedrich & Schrader, Klaus, 2003. "Neue Partner in Europa : der baltische Außenhandel im Umbruch," Open Access Publications from Kiel Institute for the World Economy 3128, Kiel Institute for the World Economy (IfW).
    5. Selim Jürgen Ergun & Bahri Yilmaz, 2003. "The Foreign Trade Pattern and Foreign Trade Specialization of Candidates of the European Union," Eastward Enlargement of the Euro-zone Working Papers wp19, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Sep 2003.
    6. Lammers, Konrad, 2002. "Die Osterweiterung aus raumwirtschaftlicher Perspektive : Prognosen regionalökonomischer Erfahrungen aus der bisherigen Integration in Europa," HWWA Discussion Papers 195, Hamburg Institute of International Economics (HWWA).

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