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Consequences of the euro adoption by Central and Eastern European (CEE) countries for their trade flows

Author

Listed:
  • Andrzej Cieślik

    (Warsaw University, Department of Economics)

  • Jan, Jakub Michałek

    (Warsaw University, Department of Economics)

  • Jerzy Mycielski

    (Warsaw University, Department of Economics)

Abstract

In this paper we estimate the trade effects of the euro adoption in Central European countries using a modified gravity model. In particular, we analyze the ex post implications of accession of Slovenia and Slovakia to the Eurozone. We employ a gravity model that controls for an extended set of trade theory and policy variables. Trade theory variables include both the country size and factor proportion variables. Trade policy variables include the membership in GATT/WTO, CEFTA, OECD, EU and Europe Agreements. The gravity model is estimated using the panel data approach on a sample of CEE countries trading with the rest of the world during the period 1992-2010 using the fixed effects, random effects and Hausman-Taylor estimators. It seems that elimination of exchange rate volatility resulted in trade expansion for the CEE countries but the accession to the Eurozone did not have any significant effects on exports of Slovakia and Slovenia.

Suggested Citation

  • Andrzej Cieślik & Jan, Jakub Michałek & Jerzy Mycielski, 2012. "Consequences of the euro adoption by Central and Eastern European (CEE) countries for their trade flows," NBP Working Papers 118, Narodowy Bank Polski.
    • Handle: RePEc:nbp:nbpmis:118
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    References listed on IDEAS

    as
    1. Andrew K. Rose & Eric van Wincoop, 2001. "National Money as a Barrier to International Trade: The Real Case for Currency Union," American Economic Review, American Economic Association, vol. 91(2), pages 386-390, May.
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    Cited by:

    1. Andrzej Cieslik & Jan Michalek & Anna Michalek, 2013. "The Impact Of The Common Currency On Exports Of New Emu Members: Firm-Level Evidence For Slovenia And Slovakia," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 8(4), pages 7-23, December.
    2. Bąk Henryk & Maciejewski Sebastian, 2015. "Endogeneity and Specialization in the European Monetary Union," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 46(1), pages 7-40, June.
    3. Oliver Polyak, 2014. "The Impact of Euro Adoption on Export Performance: Comparison of the Czech Republic and Slovakia," Working Papers IES 2014/04, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Feb 2014.
    4. Gunnella, Vanessa & Lebastard, Laura & Lopez-Garcia, Paloma & Serafini, Roberta & Mattioli, Alessandro Zona, 2021. "The impact of the euro on trade: two decades into monetary union," Occasional Paper Series 283, European Central Bank.
    5. Cieślik Andrzej & Michałek Jan & Michałek Anna, 2014. "Does the Common Currency Increase Exports? Evidence from Firm-Level Data," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 41(1), pages 8-22, March.
    6. María Santana-Gallego & Francisco Ledesma-Rodríguez & Jorge Pérez-Rodríguez, 2016. "The euro effect: Tourism creation, tourism diversion and tourism potential within the European Union," European Union Politics, , vol. 17(1), pages 46-68, March.

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    More about this item

    Keywords

    Central and Eastern Europe; exports; euro zone;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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