The Endogeneity of Association Agreements and their Impact on Trade for Eastern Countries: Empirical Evidence for Romania

20 Pages Posted: 27 Sep 2007

See all articles by Christophe Rault

Christophe Rault

IZA Institute of Labor Economics; University of Orleans; CESifo (Center for Economic Studies and Ifo Institute)

Anamaria Sova

Bucharest Academy of Economic Studies; CES Sorbonne University

Robert Sova

Academy of Economic Studies; Université Paris I Panthéon-Sorbonne - Centre Maison des Sciences Economiques

Date Written: April 2007

Abstract

The main goal of regionalization is the creation of free trade areas and the guarantee for countries to accede to a widened market. Many studies dealing with the effects of regional free trade agreements on trade flows already exist in the economic literature and the explosion of regional agreements among nations has recently stressed the key role of regionalization. However, the effects of agreements on trade have not yet been clearly determined in those studies. Our research in this paper aims at reassessing the genuine role of associations. For this matter, we particularly study the association of Romania with European Union countries. Our econometric analysis based on qualitative choice models highlights in particular why European countries chose to conclude an association agreement with Romania, and stresses the fact that European Union countries select endogenously the conclusion of association agreements. We also find a 0.29 positive impact of the association agreement on Romanian export performances.

Keywords: Regionalization, European integration, Qualitative choice models, Probit

JEL Classification: E61, F13, F15, C25.

Suggested Citation

Rault, Christophe and Rault, Christophe and Sova, Anamaria and Sova, Anamaria and Sova, Robert, The Endogeneity of Association Agreements and their Impact on Trade for Eastern Countries: Empirical Evidence for Romania (April 2007). William Davidson Institute Working Paper No. 868, Available at SSRN: https://ssrn.com/abstract=1017285 or http://dx.doi.org/10.2139/ssrn.1017285

Christophe Rault (Contact Author)

University of Orleans ( email )

Rue de Blois
BP 6739
LEO, Orleans, Orleans cedex 2 45067
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Anamaria Sova

Bucharest Academy of Economic Studies

6, Romana Square, District 1
Bucharest, 010374
Romania

CES Sorbonne University ( email )

106-112 bd. de l'Hopital, 75647, Paris, cedex 13
Paris
France

Robert Sova

Academy of Economic Studies ( email )

6 Piata Romana, 1-st District, PO 22
Bucharest, 010374
Romania

HOME PAGE: http://www.cig.ase.ro

Université Paris I Panthéon-Sorbonne - Centre Maison des Sciences Economiques

106/112 boulevard de l'Hopital
Paris Cedex 13, 75647
France

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