Trade Specialisation and Economic Convergence: Evidence from Two Eastern European Countries
Posted: 9 Jul 2009
There are 2 versions of this paper
Trade Specialisation and Economic Convergence: Evidence from Two Eastern European Countries
Trade Specialisation and Economic Convergence: Evidence from Two Eastern European Countries
Date Written: April 2009
Abstract
This paper analyses trade specialisation dynamics in two Eastern European countries (Romania and Bulgaria - EEC-2) vis-a-vis the core EU member states (EU-15) over the period 1990-2006. Specifically, we focus on whether there is a shift towards intra-industry trade leading to economic convergence and technological catch-up. We use recently developed static (FEM, REM and FEVD) and dynamic (GMM) panel data methods which take into account possible heterogeneity. Our empirical results indicate that intra-industry trade has indeed increased, but it is of the vertical rather than the horizontal type, resulting in complementary rather than competitive production patterns.
Keywords: Gravity models, panel data models, trade specialisation, comparative advantage
JEL Classification: F13, F15, C23
Suggested Citation: Suggested Citation