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Border Effects and East-West Integration

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  • Angela Cheptea

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 predicted by usual 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.

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  • Angela Cheptea, 2010. "Border Effects and East-West Integration," Working Papers SMART 10-15, INRAE UMR SMART.
    • Handle: RePEc:rae:wpaper:201015
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    File URL: http://www6.rennes.inra.fr/smart/Media/Working-papers/WP10-15
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    Cited by:

    1. Richard Frensch & Jan Hanousek & Evzen Kocenda, 2016. "Trade in Parts and Components across Europe," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 66(3), pages 236-262, June.
    2. repec:prg:jnlpep:v:preprint:id:635:p:1-20 is not listed on IDEAS
    3. Mika, Alina, 2017. "Home sweet home: the home bias in trade in the European Union," Working Paper Series 2046, European Central Bank.
    4. Yener Kandogan, 2006. "Falling Walls and Lifting Curtains: Analysis of Border Effects in Transition Countries," William Davidson Institute Working Papers Series 821, William Davidson Institute at the University of Michigan.
    5. Jürgen Jerger, 2013. "Institutionen und historische Grenzen," Working Papers 336, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).

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    More about this item

    Keywords

    Trade potential; regional integration; border effects;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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