Border Effects and European Integration

Cheptea, Angela (2011): Border Effects and European Integration. Published in:

Abstract

A new method for measuring trade potential from border effects is developed and applied to manufactured trade between the old fifteen European Union (EU) members and twelve Central and East European (CEE) economies. Border effects are estimated with three theoretically compatible trade specifications, and much larger trade potentials are obtained than usually predicted by standard trade potential models. Even after a decade of regional trade liberalization, the integration of CEE and EU economies is two to three times weaker than intra-EU integration, revealing a large potential for East-West European trade.

• Item Type: MPRA Paper
• Language: English
• Keywords: Trade potential, regional integration, border effects.
• Subjects: F - International Economics > F1 - Trade > F10 - General; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F1 - Trade > F15 - Economic Integration

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