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Trade Specialisation And Economic Convergence: Evidence From Two Eastern European Countries

  • Christophe Rault

    ()

  • Guglielmo Maria Caporale
  • 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.wdi.umich.edu/files/Publications/WorkingPapers/wp959.pdf
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Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp959.

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Length: pages
Date of creation: 01 Jun 2009
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Handle: RePEc:wdi:papers:2009-959
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  10. Guglielmo Caporale & Christophe Rault & Robert Sova & Anamaria Sova, 2009. "On the bilateral trade effects of free trade agreements between the EU-15 and the CEEC-4 countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(3), pages 573-573, October.
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  17. José Manuel Martins Caetano & Aurora Galego, 2006. "In Search for Determinants of Intra-Industry Trade within an Enlarged Europe," Economics Working Papers 2_2006, University of Évora, Department of Economics (Portugal).
  18. Kaitila, Ville, 1999. "Trade and revealed comparative advantage : Hungary, the Czech Republic, and the European Union," BOFIT Discussion Papers 8/1999, Bank of Finland, Institute for Economies in Transition.
  19. Albu, Lucian Liviu, 2008. "Trends in Structural Changes and Convergence in EU," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(1), pages 91-101, March.
  20. Peter Egger & Michael Pfaffermayr, 2003. "The proper panel econometric specification of the gravity equation: A three-way model with bilateral interaction effects," Empirical Economics, Springer, vol. 28(3), pages 571-580, July.
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  23. 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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