Time Dependent Efficiency of Free Trade Agreements - The Case of Slovenia and the CEFTA Agreement
In international trade literature there is a common feature that the abolishment of barriers to trade leads to direct expansion of trade flows. Many empirical studies that simulate welfare effects of trade liberalisation explicitly make use of this direct tariff reduction – trade expansion mechanism. On the contrary, this paper explores panel data to analyse the timedependent efficiency of Free Trade Agreements (FTAs). It is shown that trade liberalisation per se needs time to become effective, and that immediately after the enforcement of the FTA the autonomous factors (such as domestic demand for particular import goods) are of great importance. Using an illustrative case of rapid expansion of Slovenian imports from other CEECs in the period 1993–1998, the paper demonstrates that the tariff reductions become effective in the second to third year after enforcement of the FTA. In addition, the relation between tariff reductions and trade expansions is non-linear, which reflects the time needed for new business connections to be established.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Smith, Alasdair & Venables, Anthony J, 1988.
"Completing the Internal Market in the European Community: Some Industry Simulations,"
CEPR Discussion Papers
233, C.E.P.R. Discussion Papers.
- Smith, Alasdair & Venables, Anthony J., 1988. "Completing the internal market in the European Community : Some industry simulations," European Economic Review, Elsevier, vol. 32(7), pages 1501-1525, September.
- Hausman, Jerry, 2015.
"Specification tests in econometrics,"
Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
- R Blundell & Steven Bond, .
"Initial conditions and moment restrictions in dynamic panel data model,"
W14&104., Economics Group, Nuffield College, University of Oxford.
- Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
- Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
- Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Rodrik, Dani, 1992.
"Foreign Trade in Eastern Europe's Transition: Early Results,"
CEPR Discussion Papers
676, C.E.P.R. Discussion Papers.
- Dani Rodrik, 1994. "Foreign Trade in Eastern Europe's Transition: Early Results," NBER Chapters, in: The Transition in Eastern Europe, Volume 2: Restructuring, pages 319-356 National Bureau of Economic Research, Inc.
- Dani Rodrik, 1992. "Foreign Trade in Eastern Europe's Transition: Early Results," NBER Working Papers 4064, National Bureau of Economic Research, Inc.
- Haaland, Jan I., 1993. "Welfare Effects of `1992': A General Equilibrium Assessment for EC and EFTA Countries," CEPR Discussion Papers 828, C.E.P.R. Discussion Papers.
- Keane, Michael P & Runkle, David E, 1992. "On the Estimation of Panel-Data Models with Serial Correlation When Instruments Are Not Strictly Exogenous," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(1), pages 1-9, January.
- Repkine, Alexandre & Walsh, Patrick Paul, 1999. "Evidence of European Trade and Investment U-Shaping Industrial Output in Bulgaria, Hungary, Poland, and Romania," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 730-752, December.
- Halpern, László, 1994. "Comparative Advantage and Likely Trade Pattern of the CEECs," CEPR Discussion Papers 1003, C.E.P.R. Discussion Papers.
- Richard Harris, 1984. "Market Structure and Trade Liberalization: A General Equilibrium Assessment," Working Papers 584, Queen's University, Department of Economics.
- Norman, Victor D., 1990. "Assessing trade and welfare effects of trade liberalization : A comparison of alternative approaches to CGE modelling with imperfect competition," European Economic Review, Elsevier, vol. 34(4), pages 725-745, June.
- Gasiorek, Michael & Smith, Alasdair & Venables, Anthony J, 1992. "`1992': Trade and Welfare; A General Equilibrium Model," CEPR Discussion Papers 672, C.E.P.R. Discussion Papers.
- Richard Harris, 1983.
"Applied General Equilibrium Analysis of Small Open Economies with Scale Economies and Imperfect Competition,"
524, Queen's University, Department of Economics.
- Harris, Richard, 1984. "Applied General Equilibrium Analysis of Small Open Economies with Scale Economies and Imperfect Competition," American Economic Review, American Economic Association, vol. 74(5), pages 1016-32, December.
- Brenton, Paul & Gros, Daniel, 1997. "Trade Reorientation and Recovery in Transition Economies," Oxford Review of Economic Policy, Oxford University Press, vol. 13(2), pages 65-76, Summer.
- Athanasios Vamvakidis, 1998. "Regional Trade Agreements Versus Broad Liberalization: Which Path Leads to Faster Growth? Time-Series Evidence," IMF Working Papers 98/40, International Monetary Fund.
- Hoekman, Bernard & Djankov, Simeon, 1997. "Determinants of the Export Structure of Countries in Central and Eastern Europe," World Bank Economic Review, World Bank Group, vol. 11(3), pages 471-87, September.
When requesting a correction, please mention this item's handle: RePEc:eso:journl:v:33:y:2002:i:1:p:147-160. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Frank Walsh)
If references are entirely missing, you can add them using this form.