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

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

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.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.96866.de/dp875.pdf
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 875.

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Length: 27 p.
Date of creation: 2009
Date of revision:
Handle: RePEc:diw:diwwpp:dp875
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  17. Eleonora Cavallaro & Marcella Mulino, 2008. "Vertical Innovation and Catching-Up: Implications of EU Integration for CEECs-5," International Advances in Economic Research, International Atlantic Economic Society, vol. 14(3), pages 265-279, August.
  18. Lundberg, Lars, 1992. " Economic Integration, Inter- and Intra-Industry Trade: The Case of Sweden and the EC," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(3), pages 393-408.
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