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Measurement of the Trade Flows between the EU and Mercosur through Gravitation Analysis

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  • Nevena Stancheva

Abstract

This paper discusses the main factors that determine the interregional trade flows between EU and Mercosur. We apply the gravity model framework (cross-section and panel data) to examine the interregional integration effects on the trade volume for the period 1995-2005. The results show that further trade liberalization will be beneficial for both regional blocks. We found evidences for trade creation effect and “death of the distance” effect.

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  • Nevena Stancheva, 2007. "Measurement of the Trade Flows between the EU and Mercosur through Gravitation Analysis," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 66-89.
    • Handle: RePEc:bas:econth:y:2007:i:6:p:66-89
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    1. Martinez-Zarzoso, Inmaculada & Nowak-Lehmann, Felicitas, 2003. "Augmented Gravity Model: An Empirical Application to Mercosur-European Union Trade Flows," Journal of Applied Economics, Universidad del CEMA, vol. 6(2), pages 1-26, November.
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    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • F1 - International Economics - - Trade

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