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CEECs Integration into Regional Production Networks. Trade Effects of EU-Accession

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

Abstract

This paper examines the effect of the two most recent European Union enlargements on CEECs trade of intermediate and final products separately. A theoretically justified gravity model which incorporates the extensive margin of trade and accounts for firm heterogeneity is estimated using highly disaggregated trade data for the period 1999 to 2009. We hypothesize that the CEECs have a comparative advantage on the assembly of final goods and evaluate the effect of the EU-accession on CEECs imports in intermediates products and on CEECs export of final goods to OECD countries. To capture the importance of production networks, imported intermediate products from the OECD are added as a determinant of the corresponding exports of final goods. We find a positive and significant effect of accession on CEECs trade of intermediate and final goods. In particular, deeper integration and the consequent elimination of behind the border trade barriers have had a positive impact not only in terms of increasing trade volumes, but also in terms of increasing trade varieties between the two parts of the European continent. --

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Bibliographic Info

Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Berlin 2011 with number 55.

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Date of creation: 2011
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Handle: RePEc:zbw:gdec11:55

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

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  12. Cecília Hornok, 2010. "Trade-Enhancing EU Enlargement and the Resurgence of East-East Trade," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 79-94.
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