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Economic and Geographical Distance: Explaining Mercosur Sectoral Exports to the EU

Author

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  • Inmaculada Martinez-Zarzoso

    ()

  • Felicitas Nowak-Lehmann D.

    ()

Abstract

The objective of this paper is to apply a modified gravity model to annual exports disaggregated by sector, from MERCOSUR + Chile to the 15 current members of the EU. In doing so, we aimed to classify sectors according to their sensitivity to geographical and economic distance and to identify which commodities enjoy export strength even without further progress in trade liberalisation with the EU. In the estimation we made use of two additional explanatory variables which are found to be relevant when explaining trade, namely, infrastructure and exchange rates. An exchange rate index is built that takes into account protection. Our results support the view that different sectors have a different sensitivity to distance and highlight the importance of using disaggregated data when analysing international trade flows.

Suggested Citation

  • Inmaculada Martinez-Zarzoso & Felicitas Nowak-Lehmann D., 2004. "Economic and Geographical Distance: Explaining Mercosur Sectoral Exports to the EU," Open Economies Review, Springer, vol. 15(3), pages 291-314, July.
  • Handle: RePEc:kap:openec:v:15:y:2004:i:3:p:291-314
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    Citations

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    Cited by:

    1. Abdelaal Mahmoud, Ashraf, 2011. "Financial Crises and Bilateral Foreign Direct Investment Flows," MPRA Paper 30417, University Library of Munich, Germany.
    2. Felicitas Nowak-Lehmann & Dierk Herzer & Inmaculada Martinez-Zarzoso & Sebastian Vollmer, 2007. "The Impact of a Customs Union between Turkey and the EU on Turkey's Exports to the EU," Journal of Common Market Studies, Wiley Blackwell, vol. 45, pages 719-743, September.
    3. Pascal Ghazalian, 2013. "MERCOSUR enlargement: predicting the effects on trade in primary agricultural commodities," Economic Change and Restructuring, Springer, vol. 46(3), pages 277-297, August.
    4. Martínez-Zarzoso, Inmaculada & Nowak-Lehmann D., Felicitas, 2004. "MERCOSUR-European Union Trade: How important is EU Trade Liberalisation for MERCOSUR's Exports?," Center for European, Governance and Economic Development Research Discussion Papers 30, University of Goettingen, Department of Economics.
    5. Nowak-Lehmann D., Felicitas & Herzer, Dierk & Martínez-Zarzoso, Inmaculada & Vollmer, Sebastian, 2005. "Turkey and the Ankara Treaty of 1963: What can Trade Integration Do for Turkish Exports," Center for European, Governance and Economic Development Research Discussion Papers 43, University of Goettingen, Department of Economics.
    6. NOWAK-LEHMANN D., Felicitas & HERZER, Dierk & VOLLMER, Sebastian, 2007. "The Free Trade Agreement Between Chile And The Eu: Its Potential Impact On Chile’S Export Industry," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 7(1).
    7. Kavallari, Aikaterini & Maas, Sarah & Schmitz, P. Michael, 2010. "Evidence on Euromediterranean Trade Integration: The Case of German Olive Oil Imports," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(1).
    8. Pérez Mesa, Juan Carlos, 2007. "Should Almería (Spain) have to be worried, thinking that their tomato export is currently affected by international competition?," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 8(2), June.
    9. repec:kap:iaecre:v:14:y:2008:i:3:p:316-328 is not listed on IDEAS
    10. Michida, Etsuyo & Atici, Cemal & Kojima, Michikazu, 2011. "Does Quality Matter in the Iron and Scrap Trade?," IDE Discussion Papers 282, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    11. Kavallari, Aikaterini & Maas, Sarah & Schmitz, P. Michael, 2008. "Explaining German imports of olive oil: evidence from a gravity model," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44217, European Association of Agricultural Economists.

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