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Border effects in the enlarged EU area

Author

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  • M. Manchin
  • AM. Pinna

    ()

Abstract

This paper looks at the issue of border effects in the enlarged European Union. We have considered accession countries of different size and other characteristics, i.e. Hungary, Poland, Bulgaria, Romania, Latvia and Cyprus. We have measured the extent to which internal trade exceeds international trade in a set up where controls for other economic determinants of commerce have been considered. In order to avoid inflated border effects, information at the regional level both for CEECs and EU countries has been used to construct a weighted measure of distance both for between-countries and internal distances. Furthermore, in order to separate border effects from impediments to trade due to technical barriers we look at the extent of border effects for sectors grouped according to the approach adopted by the EU to remove technical barriers in the EU. All distance measures have been found negative and significant for all types of products. The border effect coefficients for the harmonic mean have been found consistently smaller, regardless the relevance of technical barriers. Furthermore distance has also been found to be a slightly smaller impediment when using the effective measure. Checking for the presence of technical barriers to trade, our results suggest that the border effects are the largest for old approach products, where we expect to have the most important technical barrier to trade due to complicated harmonization procedures. The 'other approach' category has the smallest border effects, while the 'mixed approach' products are in between the two previous categories. Our countries of interest would trade with themselves 221 times more in old approach products, while only 24 times more in other approach products.

Suggested Citation

  • M. Manchin & AM. Pinna, 2003. "Border effects in the enlarged EU area," Working Paper CRENoS 200301, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  • Handle: RePEc:cns:cnscwp:200301
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    References listed on IDEAS

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    1. James E. Anderson & Eric van Wincoop, 2001. "Borders, Trade and Welfare," Boston College Working Papers in Economics 508, Boston College Department of Economics.
    2. Holger C. Wolf, 1997. "Patterns of Intra- and Inter-State Trade," NBER Working Papers 5939, National Bureau of Economic Research, Inc.
    3. Carolyn Evans, 2006. "Border effects and the availability of domestic products abroad," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 211-246, February.
    4. Holger C. Wolf, 2000. "Intranational Home Bias In Trade," The Review of Economics and Statistics, MIT Press, vol. 82(4), pages 555-563, November.
    5. Helliwell, John F, 2002. "Measuring the Width of National Boarders," Review of International Economics, Wiley Blackwell, vol. 10(3), pages 517-524, August.
    6. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(2), pages 284-314, June.
    7. Russell H. Hillberry, 2002. "Aggregation bias, compositional change, and the border effect," Canadian Journal of Economics, Canadian Economics Association, vol. 35(3), pages 517-530, August.
    8. Volker Nitsch, 2000. "National borders and international trade: evidence from the European Union," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 1091-1105, November.
    9. John F. Helliwell, 1997. "National Borders, Trade and Migration," NBER Working Papers 6027, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Lukas Mohler & Michael Seitz, 2012. "The gains from variety in the European Union," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(3), pages 475-500, September.
    2. Annekatrin Niebuhr, 2008. "The impact of EU enlargement on European border regions," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 3(3/4), pages 163-186.
    3. Chevassus-Lozza, Emmanuelle & Majkovic, Darja & Persillet, Vanessa & Unguru, Manuela, 2005. "Technical Barriers to Trade in the European Union : Importance for the New EU Members. An Assessment for Agricultural and Food Products," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24621, European Association of Agricultural Economists.
    4. Chevassus-Lozza, Emmanuelle & Latouche, Karine & Majkovic, Darja & Unguru, Manuela, 2008. "The importance of EU-15 borders for CEECs agri-food exports: The role of tariffs and non-tariff measures in the pre-accession period," Food Policy, Elsevier, vol. 33(6), pages 595-606, December.
    5. Mika, Alina, 2017. "Home sweet home: the home bias in trade in the European Union," Working Paper Series 2046, European Central Bank.
    6. Veliko Dimitrov & Vladimir Dubrovskiy & Irina Orlova, 2007. "Institutional Harmonization in the Context of Relations Between the EU and Its Eastern Neighbours: Costs and Benefits and Methodologies of Their Measurement," CASE Network Reports 0075, CASE-Center for Social and Economic Research.
    7. Chevassus-Lozza, Emmanuelle & Latouche, Karine & Majkovic, Darja, 2007. "How Much do Non-Tariff Measures Explain the Border Effect at Entry to the EU Market? The CEECs Agri-Food Exports to EU in the Pre-Accession Period," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9852, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Yener Kandogan, 2006. "Falling Walls and Lifting Curtains: Analysis of Border Effects in Transition Countries," William Davidson Institute Working Papers Series 821, William Davidson Institute at the University of Michigan.
    9. G. Marletto, 2006. "La politica dei trasporti come politica per l'innovazione: spunti da un approccio evolutivo," Working Paper CRENoS 200605, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    10. OA Carboni & G. Medda, 2007. "Government Size and the Composition of Public Spending in a Neoclassical Growth Model," Working Paper CRENoS 200701, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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