Capital and Trade Flows in Europe and the Impact of Enlargement

Kiel Working Paper No. 1001

50 Pages Posted: 10 Nov 2000

See all articles by Claudia M. Buch

Claudia M. Buch

Deutsche Bundesbank

Daniel Piazolo

THM Technische Hochschule Mittelhessen

Multiple version iconThere are 2 versions of this paper

Date Written: September 2000


The Eastern enlargement of the European Union (EU) is likely to give a further boost to trade and capital flows, yet empirical evidence on the possible magnitudes is still scarce. This paper uses four different datasets to estimate the determinants of international asset holdings and trade flows. We find in most regressions that EU membership has a significant effect. Based on additional simulations of the expected flows to ten transition economies, we conclude that for the EU candidates actual values are still far below expected ones in most cases. Consequently, we anticipate rising capital and trade flows with the approach of EU accession, in particular for the seven EU candidates besides the Czech Republic, Hungary and Poland.

JEL Classification: F15, F17, F21, F36

Suggested Citation

Buch, Claudia M. and Piazolo, Daniel, Capital and Trade Flows in Europe and the Impact of Enlargement (September 2000). Kiel Working Paper No. 1001, Available at SSRN: or

Claudia M. Buch

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431

Daniel Piazolo (Contact Author)

THM Technische Hochschule Mittelhessen ( email )

University of Applied Sciences
Wilhelm-Leuschner-Stra├če 13
Friedberg, 61169


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