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Holding together or falling apart:Results of gravity equation of the CIS trade

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  • Kurmanalieva, Elvira
  • Vinokurov, Evgeny

Abstract

The main purpose of this paper is to assess intra-regional trade within the CIS by looking at the impact of numerous trade agreements in the region. Applying a gravity model on a set of 162 countries, we attempt to assess dynamics of intra-regional trade of various trade agreements between 1995 and 2008 in order to identify trade creation and trade diversion effects. We propose and empirically test three explanations of the CIS intra-regional trade: 1) home bias effect, 2) holding together effect and 3) holdup effect. Finally, we perform a simulation of potential trade and see to what extent twelve post-Soviet states and all their groupings would, ceteris paribus, have traded with each other.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 32003.

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Date of creation: Jun 2011
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Handle: RePEc:pra:mprapa:32003

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Keywords: Soviet Union; CIS; EurAsEC; CES; Gravity equation; Trade potential; Panel data;

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