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Disintegration and trade in South-eastern Europe

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  • Olivier Lamotte

    ()
    (ROSES)

Abstract

This paper analyses the impact of disintegration of an economic union on trade patterns. Our study focuses on South-eastern Europe, which was highly fragmented during the nineties because of the dissolution of the Council of Mutual Economic Assistance (CMEA) and of the Socialist Federal Republic of Yugoslavia (SFRY). The empirics are based on the gravity equation and the estimation uses a 29-country panel database for 1993-2001. We show that despite the setting up of barriers to trade and the war, trade flows between countries of the region remained higher than explained by their economic size and mutual distance.

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File URL: ftp://mse.univ-paris1.fr/pub/mse/cahiers2004/J04031.pdf
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Bibliographic Info

Paper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number j04031.

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Length: 24 pages
Date of creation: Dec 2003
Date of revision:
Handle: RePEc:mse:wpsorb:j04031

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Keywords: Disintegration; gravity equation; South-eastern Europe;

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References

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  1. Peter Egger, 2002. "An Econometric View on the Estimation of Gravity Models and the Calculation of Trade Potentials," The World Economy, Wiley Blackwell, vol. 25(2), pages 297-312, 02.
  2. Claudia M. Buch & Daniel Piazolo, 2000. "Capital and Trade Flows in Europe and the Impact of Enlargement," Kiel Working Papers 1001, Kiel Institute for the World Economy.
  3. 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.
  4. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-81, August.
  5. Egger, Peter, 2000. "A note on the proper econometric specification of the gravity equation," Economics Letters, Elsevier, vol. 66(1), pages 25-31, January.
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  7. Cheikbossian, Guillaume & Maurel, Mathilde, 1997. "The New Geography of Eastern European Trade," CEPR Discussion Papers 1580, C.E.P.R. Discussion Papers.
  8. Jeffrey A. Frankel, 1997. "Regional Trading Blocs in the World Economic System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 72.
  9. Hausman, Jerry A. & Taylor, William E., 1981. "Panel data and unobservable individual effects," Journal of Econometrics, Elsevier, vol. 16(1), pages 155-155, May.
  10. Koukhartchouk, Oxana & Maurel, Mathilde, 2003. "Accession to the WTO and EU Enlargement: What Potential for Trade Increase?," CEPR Discussion Papers 3944, C.E.P.R. Discussion Papers.
  11. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-53, February.
  12. Gérard Duchêne, 1994. "Intégration ou désintégration économique dans l'ex-URSS," Revue Économique, Programme National Persée, vol. 45(3), pages 575-588.
  13. Nitsch, Volker, 2002. "Border effects and border regions: Lessons from the German unification," HWWA Discussion Papers 203, Hamburg Institute of International Economics (HWWA).
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  15. James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
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  17. repec:fth:michin:382 is not listed on IDEAS
  18. Keith Head & Thierry Mayer, 2004. "Non-Europe : the magnitude and causes of market fragmentation in the EU," Cahiers de la Maison des Sciences Economiques bla99004a, Université Panthéon-Sorbonne (Paris 1).
  19. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June.
  20. Andrew K. Rose, 2004. "Do We Really Know That the WTO Increases Trade?," American Economic Review, American Economic Association, vol. 94(1), pages 98-114, March.
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  22. Kaminski, Bartlomiej & de la Rocha, Manuel, 2003. "Stabilization and association process in the Banlkans : integration options and their assessment," Policy Research Working Paper Series 3108, The World Bank.
  23. 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.
  24. repec:wii:bpaper:bowp:011 is not listed on IDEAS
  25. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
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