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Does political disintegration lead to trade disintegration? Evidence from transition countries1

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  • José De Sousa
  • Olivier Lamotte

Abstract

Recent studies have found that political disintegration is a cause of severe and rapid trade disintegration in former Eastern European countries. This finding somewhat conflicts with another strand of the literature highlighting the fact that trade patterns change relatively slowly. This article aims at reconciling the apparent inconsistency between these two results. Using a theoretically grounded gravity equation, we evaluate the intensity of trade between successor states of three former countries (Czechoslovakia, the Soviet Union and Yugoslavia) in the period 1993–2001. We find no clear evidence that political disintegration leads to systematic and severe trade disintegration. This result is consistent with the patterns displayed by using simple descriptive statistics, is robust to sensitivity checks, and supports the idea of hysteresis in trade.

Suggested Citation

  • José De Sousa & Olivier Lamotte, 2007. "Does political disintegration lead to trade disintegration? Evidence from transition countries1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15(4), pages 825-843, October.
    • Handle: RePEc:bla:etrans:v:15:y:2007:i:4:p:825-843
    DOI: 10.1111/j.1468-0351.2007.00310.x
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    Cited by:

    1. J.M.C. Santos Silva & Silvana Tenreyro, 2010. "Currency Unions in Prospect and Retrospect," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 51-74, September.
    2. Joze Damijan & José de Sousa & Olivier Lamotte, 2010. "Trade Liberalization in Southeastern Europe," Chapters, in: Robert E.B. Lucas & Lyn Squire & T. N. Srinivasan (ed.), Global Exchange and Poverty, chapter 4, Edward Elgar Publishing.
    3. Lucie Coufalová, 2020. "Sankce západních zemí a ruská odvetná opatření: dopad na české exporty [Sanctions by Western Countries and Russian Countermeasures: Impact on Czech Exports]," Politická ekonomie, Prague University of Economics and Business, vol. 2020(3), pages 348-366.
    4. repec:lic:licosd:21908 is not listed on IDEAS
    5. Emilio Calvo, 2021. "Redistribution of tax resources: a cooperative game theory approach," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(4), pages 633-686, December.
    6. Libman, Alexander, 2008. "Informal regionalism in Central Asia: subnational and international levels," MPRA Paper 26417, University Library of Munich, Germany.
    7. Emmanuelle Lavallée & Julie Lochard, 2012. "Independence and trade: new evidence from French colonial trade data," Post-Print hal-01609979, HAL.
    8. repec:dau:papers:123456789/10246 is not listed on IDEAS
    9. Flynn, Eimear & Kren, Janez & Lawless, Martina, 2021. "Early reactions of EU-UK trade flows to Brexit," Papers WP713, Economic and Social Research Institute (ESRI).
    10. Anna Golovko & Hasan Sahin, 2021. "Analysis of international trade integration of Eurasian countries: gravity model approach," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 11(3), pages 519-548, September.
    11. Lucie Coufalová & Libor Žídek, 2017. "Is Czech Export still Biased towards the Eastern Markets?," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 65(4), pages 1339-1347.
    12. Maria Stella Chiaruttini, 2014. "EU, Russia and the reshaping of the post-Soviet economic space: an international trade analysis," ERSA conference papers ersa14p764, European Regional Science Association.

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