European Trade Integration in the Baltic Sea Region - a Gravity Model Based Analysis
26 Pages Posted: 26 Nov 2005
Date Written: October 2005
Abstract
The paper explores regional trade integration of the countries involved in the EU eastward enlargement (EU-25) processes distinguishing the possible regional trade clusters within EU-25 that may support integration of the EU-15 and the new member states. We examine whether the gravity equation based on the new trade theory describes trade integration of the EU-25 countries, and whether the results of a gravity model based analysis may be different in the case of the Baltic Sea region (BSR). The gravity models are estimated based on panel data for the years 1993 to 2002. The results of our analysis indicate that the BSR is forming an exception within EU-25. The BSR trade cannot be explained as much with New Trade Theories as in the case of the whole EU. The BSR countries have different factor endowments and the intensive trade relations between the BSR countries are mainly based on comparative advantages.
Keywords: gravity models, international trade, regional integration, Baltic Sea region
JEL Classification: F15, R1, C5
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Institutional Determinants of Bilateral Trade Patterns
By Henri L. F. De Groot, Gert-jan Linders, ...
-
Cultural and Institutional Determinants of Bilateral Trade Flows
By Gert-jan Linders, Arjen Hl Slangen, ...
-
Trade Implies Law: The Power of the Weak
By James E. Anderson and Leslie Young
-
The Impact of Mode 4 Liberalization on Bilateral Trade Flows
By Marion Jansen and Roberta Piermartini
-
The Impact of Mode 4 Liberalization on Bilateral Trade Flows
By Marion Jansen and Roberta Piermartini
-
Accession to the WTO and EU Enlargement: What Potential for Trade Increase?