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Western Balkan’s trade with the EU and CEFTA-2006: Evidence from Macedonian data

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  • Mojsoska-Blazevski, Nikica
  • Petreski, Marjan

Abstract

The objective of this paper is to empirically examine the determinants of bilateral trade of Macedonia, with particular emphasis on the trade with the EU and CEFTA-2006 countries. The standard Gravity model is used to measure the determinants of the bilateral trade in a panel framework. Results suggest that Macedonian GDP per capita and foreign GDP per capita play significant role in explaining bilateral trade. When Macedonian trade with EU is investigated only, then domestic income has larger magnitude than compared to the entire sample. Importantly, no additional gains have been approximated from FTAs and from CEFTA-2006, in particular. Potential explanation of this can be the still existent non-tariff barriers across the SEE countries, in terms of the technical, sanitary and phyto-sanitary barriers to trade, the time and costs to export and import, improvement of infrastructure related to trade and so on.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 41942.

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Date of creation: 2010
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Handle: RePEc:pra:mprapa:41942

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Related research

Keywords: bilateral trade; Gravity model; Macedonia; non-tariff barriers;

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References

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  1. Edward Christie, 2002. "Potential Trade in Southeast Europe: a Gravity Model Approach," wiiw Working Papers 21, The Vienna Institute for International Economic Studies, wiiw.
  2. Juan Carlos Hallak & Jagadeesh Sivadasan, 2010. "Firms' Exporting Behavior under Quality Constraints," Working Papers 99, Universidad de San Andres, Departamento de Economia, revised Mar 2010.
  3. Sarafidis, Vasilis & Yamagata, Takashi & Robertson, Donald, 2009. "A test of cross section dependence for a linear dynamic panel model with regressors," Journal of Econometrics, Elsevier, vol. 148(2), pages 149-161, February.
  4. Edward F. Buffie, 1992. "On the Condition for Export-Led Growth," Canadian Journal of Economics, Canadian Economics Association, vol. 25(1), pages 211-25, February.
  5. 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.
  6. Xu, Zhenhui, 1996. "On the Causality between Export Growth and GDP Growth: An Empirical Reinvestigation," Review of International Economics, Wiley Blackwell, vol. 4(2), pages 172-84, June.
  7. Matthieu Bussière & Jarko Fidrmuc & Bernd Schnatz, 2005. "Trade Integration of Central and Eastern European Countries: Lessons from a Gravity Model," Working Papers 105, Oesterreichische Nationalbank (Austrian Central Bank).
  8. Judith A. Giles, & Cara L. Williams, 1999. "Export-led Growth: A Survey of the Empirical Literature and Some Noncausality Results," Econometrics Working Papers 9901, Department of Economics, University of Victoria.
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