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Do Free Trade Regimes and Common Currency Drive Export Growth?

Author

Listed:
  • Mindaugas Butkus
  • Henrikas Karpavičius
  • Kristina Matuzevičiūtė

Abstract

It is believed that in many countries export activities could enhance countries' capabilities. It is also believed that trade liberalization or common currency could be an export driver. This paper examines the impact of trade liberalization and common currency on EU countries' export growth. The methodology applied in this research is constructed using specifics of the data that arise from a natural experiment. We examined how exogenous events like joining the EU, WTO, EFTA or becoming a member of Eurozone change the environment, in which countries trade. The results using an unbalanced panel data consisting of 28 EU countries for the period 1995-2015 revealed that membership in WTO instantly increases export by 12.5-13.5%, but has no extra effect in longer period; membership in the EU and EFTA has effect on export with a time lag and common currency did not affect export growth at all.

Suggested Citation

  • Mindaugas Butkus & Henrikas Karpavičius & Kristina Matuzevičiūtė, 2018. "Do Free Trade Regimes and Common Currency Drive Export Growth?," Prague Economic Papers, Prague University of Economics and Business, vol. 2018(6), pages 654-667.
    • Handle: RePEc:prg:jnlpep:v:2018:y:2018:i:6:id:663:p:654-667
    DOI: 10.18267/j.pep.663
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    References listed on IDEAS

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    More about this item

    Keywords

    export growth; trade regimes; common currency;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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