Trade Potential in an Enlarged European Union: A Recent Approach

34 Pages Posted: 19 Jan 2016

See all articles by Maria Paula Fontoura

Maria Paula Fontoura

Technical University of Lisbon (UTL) - Department of Economics; UECE - Research Unit on Complexity in Economics

Enrique Martínez-Galán

School of Economics and Management (ISEG) of the University of Lisbon; Office for Economic Policy and International Affairs, GPEARI, Ministry of Finance, Portugal; Research Unit on Complexity and Economics; Studies Center for Africa, Asia and Latin America (CEsA)

Isabel Maria Dias Proenca

Technical University of Lisbon (UTL) - School of Economics and Management

Date Written: August 19, 2006

Abstract

This paper aims to evaluate the trade potential of manufactured products between countries belonging to the EU in the threshold of its Eastern enlargement. For this purpose we use a Gravity model which is estimated with a Poisson Pseudo-Maximum Likelihood Method. We extend the specification of the gravity model in order to capture bilateral trade specificities between groups of countries of the enlarged EU, allowing to test the statistical significance of these inter-groups’ trade potential. In addition, it includes the Commodity Composition of Trade. The estimated coefficients are used to project exports of each country. We conclude that in 2002 the CEEC as a group had exhausted their export potentialities to the enlarged EU, whereas the same does not apply to its imports from the EU members.

Keywords: European Union, CEEC, Gravity Model, Commodity Composition of Trade Poisson Pseudo-Maximum Likelihood Estimator, Trade Potential

JEL Classification: F14, F15, F17

Suggested Citation

Fontoura, Maria Paula and Martínez-Galán, Enrique and Dias Proenca, Isabel Maria, Trade Potential in an Enlarged European Union: A Recent Approach (August 19, 2006). Portuguese Economic Journal, Vol. 7, No. 3, 2008, Available at SSRN: https://ssrn.com/abstract=2718065 or http://dx.doi.org/10.2139/ssrn.2718065

Maria Paula Fontoura

Technical University of Lisbon (UTL) - Department of Economics ( email )

R. Miguel Lupi, 20
Lisbon, 1248-078
Portugal

UECE - Research Unit on Complexity in Economics ( email )

ISEG/UTL, Rua Miguel Lupi 20
Lisboa, 1249-078
Portugal

Enrique Martínez-Galán (Contact Author)

School of Economics and Management (ISEG) of the University of Lisbon ( email )

Portugal
351218823405 (Phone)

HOME PAGE: http://pascal.iseg.utl.pt/~cesa/index.php/pt/home/455

Office for Economic Policy and International Affairs, GPEARI, Ministry of Finance, Portugal ( email )

Av. Infante D. Henrique, 1-C, 1º
Lisbon, Lisbon 1100-278
Portugal
351218823405 (Phone)

Research Unit on Complexity and Economics ( email )

Rua Miguel Lupi, 20
Lisboa, 1200-781
Portugal
351218823405 (Phone)

Studies Center for Africa, Asia and Latin America (CEsA) ( email )

Rua Miguel Lupi, 20
Lisbon, Lisbon 1249-078
Portugal
351218823405 (Phone)

Isabel Maria Dias Proenca

Technical University of Lisbon (UTL) - School of Economics and Management ( email )

R. Miguel Lupi, 20
Lisbon, 1200
Portugal

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