IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Intra-European Union trade openness and new members’ output convergence: A time-series analysis

The current literature on the 5th European Union (EU) enlargement shows widespread support of beta-convergence between old and new members but partial support in favour of stochastic convergence. In this paper, I try to assess whether this process may have been significantly facilitated by intra-EU trade using a range of cross-section or panel cointegration and causality tests. This is a possibility not accounted for in the standard neoclassical model, nor deeply investigated in the enlargement literature, but one which can potentially explain the differences researchers observe across countries. Preliminary evidence fails to confirm the predominant role of trade openness in stimulating output convergence suggested, at a more general level, by previous research.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://eprints.kingston.ac.uk/23366/
File Function: Full text
Download Restriction: no

Paper provided by School of Economics, Kingston University London in its series Economics Discussion Papers with number 2012-5.

as
in new window

Length: 21 pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:ris:kngedp:2012_005
Contact details of provider: Postal: Kingston University London, School of Economics, Penrhyn Road, Kingston upon Thames, Surrey, KT1 2EE, UK
Web page: http://fass.kingston.ac.uk/departments/economics/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Hiro Y. Toda & Peter C.B. Phillips, 1991. "Vector Autoregression and Causality," Cowles Foundation Discussion Papers 977, Cowles Foundation for Research in Economics, Yale University.
  2. Ville Kaitila, 2005. "Integration and Conditional Convergence in the Enlarged EU Area," Economics Working Papers 031, European Network of Economic Policy Research Institutes.
  3. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
  4. Alejandro Cuñat & Marco Maffezzoli, 2005. "Can Comparative Advantage Explain the Growth of US Trade?," CEP Discussion Papers dp0669, Centre for Economic Performance, LSE.
  5. repec:umd:umdeco:rodriguez9901 is not listed on IDEAS
  6. Judith Giles & Cara Williams, 2001. "Export-led growth: a survey of the empirical literature and some non-causality results. Part 1," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 9(3), pages 261-337.
  7. Taku Yamamoto & Eiji Kurozumi, 2006. "Tests for Long-Run Granger Non-Causality in Cointegrated Systems," Journal of Time Series Analysis, Wiley Blackwell, vol. 27(5), pages 703-723, 09.
  8. Greenaway, David & Foster, Neil, 2002. "North-South Trade, Knowledge Spillovers and Growth," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 650-670.
  9. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584.
  10. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
  11. Sebastian Edwards, 1991. "Trade Orientation, Distortions and Growth in Developing Countries," NBER Working Papers 3716, National Bureau of Economic Research, Inc.
  12. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
  13. Bernard, A.B. & Durlauf, S.N., 1993. "Convergence in International Output," Working papers 93-7, Massachusetts Institute of Technology (MIT), Department of Economics.
  14. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
  15. Dumitrescu, Elena-Ivona & Hurlin, Christophe, 2012. "Testing for Granger non-causality in heterogeneous panels," Economic Modelling, Elsevier, vol. 29(4), pages 1450-1460.
  16. Bernard, A.B. & Durlauf, S.N., 1994. "Interpreting Tests of the Convergence Hypothesis," Working papers 9401r, Wisconsin Madison - Social Systems.
  17. Rivera-Batiz, Luis A & Romer, Paul M, 1991. "Economic Integration and Endogenous Growth," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 531-55, May.
  18. Charles Ka-Yui Leung & Danny T., Quah, 1996. "Convergence, Endogenous Growth, and Productivity Disturbances," Departmental Working Papers _070, Chinese University of Hong Kong, Department of Economics.
  19. Francisco Rodriguez & Dani Rodrik, 1999. "Trade Policy and Economic Growth: A Skeptic's Guide to Cross-National Evidence," NBER Working Papers 7081, National Bureau of Economic Research, Inc.
  20. Guillaume Gaulier, 2003. "Trade and Convergence: Revisiting Ben-David," Working Papers 2003-06, CEPII research center.
  21. Slaughter, Matthew J, 1997. "Per Capita Income Convergence and the Role of International Trade," American Economic Review, American Economic Association, vol. 87(2), pages 194-99, May.
  22. Ghatak, Subrata & Pop-Silaghi, Monica Ioana & Daly, Vince, 2008. "Trade and migration flows between some CEE countries and the UK," Economics Discussion Papers 2008-1, School of Economics, Kingston University London.
  23. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
  24. Sebastian Edwards, 1997. "Openness, Productivity and Growth: What Do We Really Know?," NBER Working Papers 5978, National Bureau of Economic Research, Inc.
  25. Partha Chatterjee & Malik Shukayev, 2006. "Convergence in a Stochastic Dynamic Heckscher-Ohlin Model," Working Papers 06-23, Bank of Canada.
  26. Young, Andrew & Higgins, Matthew & Levy, Daniel, 2007. "Sigma Convergence versus Beta Convergence: Evidence from U.S. County-Level Data," MPRA Paper 2714, University Library of Munich, Germany.
  27. Xuepeng Liu, 2009. "Trade and income convergence: Sorting out the causality," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 18(1), pages 169-195.
  28. Julia Spies & Helena Marques, 2009. "Trade effects of the Europe agreements: A theory-based gravity approach," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 18(1), pages 11-35.
  29. Deardorff, A.V., 1997. "Rich and Poor Countries in Neoclassical Trade and Growth," Working Papers 402, Research Seminar in International Economics, University of Michigan.
  30. Francisco Rodriguez, 2007. "Openness and growth: what have we learned?," Working Papers 51, United Nations, Department of Economics and Social Affairs.
  31. Konya, L., 2004. "Export-Led Growth, Growth-Driven Export, Both or None? Granger Causality Analysis on OECD Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 4(1).
  32. Ingianni, Andrea & Žd’árek, Václav, 2009. "Real Convergence in the New Member States: Myth or Reality?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 24, pages 294-320.
  33. Claustre Bajona & Timothy Kehoe, 2010. "Trade, Growth, and Convergence in a Dynamic Heckscher-Ohlin Model," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(3), pages 487-513, July.
  34. Pedroni, Peter, 1999. " Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 653-70, Special I.
  35. Zaman, Asad, 2008. "Causal Relations via Econometrics," MPRA Paper 10128, University Library of Munich, Germany.
  36. Wacziarg, Romain & Welch, Karen Horn, 2003. "Trade Liberalization and Growth: New Evidence," Research Papers 1826, Stanford University, Graduate School of Business.
  37. Ben-David, Dan, 1993. "Equalizing Exchange: Trade Liberalization and Income Convergence," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 653-79, August.
  38. Mosconi, Rocco & Giannini, Carlo, 1992. "Non-causality in Cointegrated Systems: Representation Estimation and Testing," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 399-417, August.
  39. Sims, Christopher A & Stock, James H & Watson, Mark W, 1990. "Inference in Linear Time Series Models with Some Unit Roots," Econometrica, Econometric Society, vol. 58(1), pages 113-44, January.
  40. Kelly, Morgan, 1992. "On endogenous growth with productivity shocks," Journal of Monetary Economics, Elsevier, vol. 30(1), pages 47-56, October.
  41. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  42. Matthew J. Slaughter, 1997. "Per Capita Income Convergence and the Role of International Trade," NBER Working Papers 5897, National Bureau of Economic Research, Inc.
  43. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  44. Judith Giles & Cara Williams, 2001. "Export-led growth: a survey of the empirical literature and some non-causality results. Part 2," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 9(4), pages 445-470.
  45. Dinopoulos, Elias & Segerstrom, Paul, 2006. "North-South Trade and Economic Growth," CEPR Discussion Papers 5887, C.E.P.R. Discussion Papers.
  46. Ben-David, Dan & B. Loewy, Michael, 2003. "Trade and the Neoclassical Growth Model," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 18, pages 1-16.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ris:kngedp:2012_005. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Andrea Ingianni)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.