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Economic integration in a multicone world?

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  • Volpe Martincus, Christian
  • Pédussel Wu, Jennifer

Abstract

This paper examines whether economic integration favors countries' convergence into a common cone of diversification. We analyze the manufacturing specialization patterns for a sample of 19 current and potential European Union countries over the period 1963-1998, and assess the impact of integration on their evolution. We perform year-by-year threshold estimations of Rybczynski relationships to identify the diversification cones and then estimate discrete choice models to investigate whether membership in the European Union is associated with a higher probability of being in a same cone. Economic integration in Europe is found to have promoted convergence from lower to higher diversification cones.

Suggested Citation

  • Volpe Martincus, Christian & Pédussel Wu, Jennifer, 2005. "Economic integration in a multicone world?," ZEI Working Papers B 07-2005, University of Bonn, ZEI - Center for European Integration Studies.
    • Handle: RePEc:zbw:zeiwps:b072005
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    References listed on IDEAS

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    1. Ben-David, Dan, 1996. "Trade and convergence among countries," Journal of International Economics, Elsevier, vol. 40(3-4), pages 279-298, May.
    2. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
    3. Dan Ben-David, 1993. "Equalizing Exchange: Trade Liberalization and Income Convergence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 653-679.
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    Cited by:

    1. Catia Batista & Jacques Potin, 2007. "Stages of diversification and specialization in an Heckscher-Ohlin world, 1976-2000," Economics Series Working Papers 356, University of Oxford, Department of Economics.

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    More about this item

    Keywords

    Multiple Diversification Cones; Convergence; European Integration; Threshold Estimation; Dynamic Probit Models;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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