Trade Specialisation and Economic Convergence: Evidence from Two Eastern European Countries

32 Pages Posted: 3 Aug 2010  

Christophe Rault

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

Guglielmo Maria Caporale

Brunel University London - Department of Economics and Finance; London South Bank University; CESifo (Center for Economic Studies and Ifo Institute)

Robert Sova

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

Anamaria Sova

Bucharest Academy of Economic Studies; CES Sorbonne University

Multiple version iconThere are 2 versions of this paper

Date Written: June 14, 2009

Abstract

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

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

Christophe Rault (Contact Author)

University of Orleans

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

Guglielmo Maria Caporale

Brunel University London - Department of Economics and Finance ( email )

Kingston Lane
Marie Jahoda Building
Uxbridge, Middlesex UB8 3PH
United Kingdom
+44 1895 266713 (Phone)
+44 1895 269770 (Fax)

HOME PAGE: http://www.brunel.ac.uk/about/acad/bbs/bbsstaff/ef_staff/guglielmocaporale/

London South Bank University ( email )

Centre for Monetary and Financial Economics
London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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

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

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