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On The Trade Balance Effects Of Free Trade Agreements Between The Eu-15 And The Ceec-4 Countries

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  • Guglielmo Maria CAPORALE,

    ()

  • Christophe Rault

    ()

  • Robert SOVA

    ()

  • Ana Maria SOVA

    ()

Abstract

The expansion of regionalism has spawned an extensive theoretical literature analyzing the effects of Free Trade Agreements (FTAs) on trade flows. In this paper we focus on FTAs (also called European agreements) between the European Union (EU-15) and the Central and Eastern European countries (CEEC-4, i.e. Bulgaria, Hungary, Poland and Romania) and model their effects on trade flows by treating the agreement variable as endogenous. Our theoretical framework is the gravity model, and the econometric method used to isolate and eliminate the potential endogeneity bias of the agreement variable is the fixed effect vector decomposition (FEVD) technique.

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File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp912.pdf
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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp912.

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Length: pages
Date of creation: 01 Mar 2008
Date of revision:
Handle: RePEc:wdi:papers:2008-912

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Keywords: Regionalisation; European integration; Panel data methods.;

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  1. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
  2. Baier, Scott L. & Bergstrand, Jeffrey H., 2004. "Economic determinants of free trade agreements," Journal of International Economics, Elsevier, vol. 64(1), pages 29-63, October.
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