Disintegration and Trade

Fidrmuc, Jarko; Fidrmuc, Jan

doi:10.2139/ssrn.295779

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Disintegration and Trade

Center for European Integration Studies (ZEI) Working Paper No. B24-2001

34 Pages Posted: 9 Jan 2002

See all articles by Jarko Fidrmuc

Brunel University - Department of Economics and Finance; L.E.M., Université de Lille; CESifo (Center for Economic Studies and Ifo Institute); Global Labor Organization (GLO); Institute for Strategy and Analysis, Government Office of the Slovak Republic

There are 2 versions of this paper

Date Written: March 2001

Abstract

The gravity model of trade is utilized to assess the impact of disintegration on trade. The analysis is based on three recent disintegration episodes involving the former Soviet Union, Yugoslavia and Czechoslovakia. The results point to a very strong home bias around the time of disintegration, with intra-union trade exceeding normal trade approximately 43 times in the former Soviet Union and Czechoslovakia, and 24 times in the former Yugoslavia. Disintegration was followed by a sharp fall in trade intensity. Nevertheless, there is a considerable hysteresis in economic relations, with trade flows among the former constituent Republics still between two and 30 times greater than normal trade in 1998.

Keywords: Gravity Model, International Trade, Disintegration, Panel Data

JEL Classification: C23, F13, F15, F41

Suggested Citation: Suggested Citation

Fidrmuc, Jarko and Fidrmuc, Jan and Fidrmuc, Jan, Disintegration and Trade (March 2001). Center for European Integration Studies (ZEI) Working Paper No. B24-2001, Available at SSRN: https://ssrn.com/abstract=295779 or http://dx.doi.org/10.2139/ssrn.295779