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Trade Potential In An Enlarged European Union: A Recent Approach

  • Enrique Martínez-Galán

    (ISEG-UTL & Portuguese Ministry for Finance)

  • Maria-Paula Fontoura


  • Isabel Proença


This paper aims to evaluate the trade potential of manufactured products between the members of the EU25 in the threshold of its Eastern enlargement. We estimate, for 2002, a cross-section gravity model, whose coefficients will be used to project the “natural” trade relations between them. Relatively to previous evaluations of trade potential, we include in the gravity model a variable related to the countries’ complementarities in terms of their Commodity Composition of Trade and we opt for a Poisson Pseudo-Maximum Likelihood Estimator. The latter is confronted with the OLS estimator normally used in this type of models.

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Paper provided by EconWPA in its series International Trade with number 0508011.

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Length: 31 pages
Date of creation: 31 Aug 2005
Date of revision:
Handle: RePEc:wpa:wuwpit:0508011
Note: Type of Document - pdf; pages: 31
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  14. Marius Brülhart & Mary J. Kelly, 1999. "Ireland’s Trading Potential with Central and Eastern European Countries - A Gravity Study," The Economic and Social Review, Economic and Social Studies, vol. 30(2), pages 159-174.
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