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Trade Specialisation and Economic Convergence: Evidence from Two Eastern European Countries

Author

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  • Guglielmo Maria Caporale
  • Christophe Rault
  • Robert Sova
  • Anamaria Sova

Abstract

This paper analyses trade specialisation dynamics in two Eastern European countries (Romania and Bulgaria - EEC-2) vis-à-vis the core EU member states (EU-15) over the period 1990-2006. Specifically, we focus on whether there is a shift towards intra-industry trade leading to economic convergence and technological catch-up. We use recently developed static (FEM, REM and FEVD) and dynamic (GMM) panel data methods which take into account possible heterogeneity. Our empirical results indicate that intra-industry trade has indeed increased, but it is of the vertical rather than the horizontal type, resulting in complementary rather than competitive production patterns.

Suggested Citation

  • Guglielmo Maria Caporale & Christophe Rault & Robert Sova & Anamaria Sova, 2009. "Trade Specialisation and Economic Convergence: Evidence from Two Eastern European Countries," Discussion Papers of DIW Berlin 875, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp875
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    Cited by:

    1. Dumitru Miron & Alina Mihaela Dima & Simona Vasilache, 2010. "Models Of The Intra-Regional Trade Influence On Economic Sustainable Development In Romania," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 12(27), pages 27-35, February.
    2. Safet KURTOVIC & Blerim HALILI & Nehat MAXHUNI, 2017. "The effect of preferential tariffs of the EU: Some evidence from B&H," Journal of Economics and Political Economy, KSP Journals, vol. 4(3), pages 247-262, September.
    3. Marius-Razvan Surugiu & Camelia Surugiu, 2012. "Intra-industry trade in Romania: analysis of the automobile parts and accessories sector," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 166-179.
    4. repec:mbr:jmonec:v:8:y:2013:i:1:p:169-181 is not listed on IDEAS
    5. Kurtovic, Safet & Halili, Blerim & Maxhuni, Nehat, 2016. "Liberalization of Trade with Leading Trade Partners: Some Evidence from Bosnia and Herzegovina," MPRA Paper 75053, University Library of Munich, Germany, revised 04 Nov 2016.
    6. Eleonora Cavallaro & Piero Esposito & Alessia Matano & Marcella Mulino, 2013. "Technological Catching Up, Quality of Exports, and Competitiveness: A Sectoral Perspective," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 49(6), pages 4-21, November.
    7. Irena Aokić & Zlatan Fröhlich & Ivana Rašić Bakarić, 2016. "The impact of the economic crisis on regional disparities in Croatia," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 9(1), pages 179-195.
    8. Nuno Carlos LEITÃO & Marius-Razvan SURUGIU & Camelia SURUGIU, 2014. "Romanian intra-industry trade: a panel data approach," EuroEconomica, Danubius University of Galati, issue 2(33), pages 7-18, November.

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    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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