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CEECs integration into regional and global production networks

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  • Martínez-Zarzoso, Inmaculada
  • Voicu, Anca M.
  • Vidovic, Martina

Abstract

This paper examines the involvement of the CEECs into regional and global production networks over the period 1999 to 2009. We employ a theoretically justified gravity model which incorporates the extensive margin of trade and accounts for firm heterogeneity. We first estimate the model for highly disaggregated exports (SITC 5-digits) in final goods, and then augment it by including the corresponding imported intermediate products from the OECD together with the usual control variables. Next, we estimate the model for each trade margin (extensive and intensive) separately to evaluate the effects of economic integration on exports and imports of each category of goods. Our results indicate that the CEECs have indeed become more integrated into regional production networks and this has had a positive impact in terms of increasing trade volumes and trade varieties between the two parts of the European continent. --

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Bibliographic Info

Paper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 125.

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Date of creation: 2011
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Handle: RePEc:zbw:cegedp:125

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Web page: http://www.cege.wiso.uni-goettingen.de/
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Related research

Keywords: exports; gravity equation; panel data; production networks; economic integration; trade flows;

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  12. Kaminski, Bartlomiej & Ng, Francis, 2005. "Production disintegration and integration of Central Europe into global markets," International Review of Economics & Finance, Elsevier, Elsevier, vol. 14(3), pages 377-390.
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  14. Joao Santos Silva & Silvana Tenreyro, 2005. "The log of gravity," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 3744, London School of Economics and Political Science, LSE Library.
  15. Götz Zeddies, 2007. "Determinants of International Fragmentation of Production in the European Union," IWH Discussion Papers, Halle Institute for Economic Research 15, Halle Institute for Economic Research.
  16. Prema-chandra Athukorala, 2003. "Product Fragmentation and Trade Patterns in East Asia," Departmental Working Papers, The Australian National University, Arndt-Corden Department of Economics 2003-21, The Australian National University, Arndt-Corden Department of Economics.
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