32 Pages Posted: 3 Aug 2010
Date Written: June 14, 2009
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.
Keywords: gravity models, panel data models, trade specialisation, comparative advantage
JEL Classification: F13, F15, C23
Suggested Citation: Suggested Citation
Rault, Christophe and Caporale, Guglielmo Maria and Sova, Robert and Sova, Anamaria, Trade Specialisation and Economic Convergence: Evidence from Two Eastern European Countries (June 14, 2009). William Davidson Institute Working Paper No. 959. Available at SSRN: https://ssrn.com/abstract=1488944 or http://dx.doi.org/10.2139/ssrn.1488944