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Border Effects and European Integration

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  • Cheptea, Angela

Abstract

A new method for measuring trade potential from border effects is developed and applied to manufactured trade between the old fifteen European Union (EU) members and twelve Central and East European (CEE) economies. Border effects are estimated with three theoretically compatible trade specifications, and much larger trade potentials are obtained than usually predicted by standard trade potential models. Even after a decade of regional trade liberalization, the integration of CEE and EU economies is two to three times weaker than intra-EU integration, revealing a large potential for East-West European trade.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 47009.

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Date of creation: Feb 2011
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Handle: RePEc:pra:mprapa:47009

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Keywords: Trade potential; regional integration; border effects.;

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References

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  1. Redding, Stephen J & Venables, Anthony J., 2000. "Economic Geography and International Inequality," CEPR Discussion Papers 2568, C.E.P.R. Discussion Papers.
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Cited by:
  1. Jürgen Jerger, 2013. "Institutionen und historische Grenzen," Working Papers 336, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).

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