Business Intelligence

Europe Agreements And Trade Balance: Evidence Form Four New EU Members

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Executive Summary

This paper analyses the trade balance effects of Europe Agreements (EA) between the EU- 15 and four new EU members from Central and Eastern Europe (CEEC-4) using both static and dynamic panel data approaches. Specifically, the system Generalized Method of Moments (GMM, Blundell and Bond, 1998) and recently developed econometric methods such as the Correlated Common Estimation Pooled - Hausman-Taylor (CCEPHT, Serlenga and Shin, 2007) are applied to analyze the effects of the agreement variable. The authors' estimation results indicate a positive and significant impact of EA on trade flows.

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