Prague Economic Papers 2018, 27(1):21-39 | DOI: 10.18267/j.pep.639

Is a Model of Comprehensive Regionalism Trade-Increasing for V4 Countries? Sectoral Approach

Iryna Gauger1, Katarzyna Sledziewska2
1 University of Warsaw, Poland (irenas_ua@yahoo.com)
2 University of Warsaw, Poland (k.sledziewska@uw.edu.pl)

This paper aims to identify the impact of a "deep" (economic union) and "shallow" (Common Commercial Policy) integration on 4 Visegrad countries' trade with the EU and non-EU industrialized countries. Trade flows are analysed on the basis of sectors over the period of 1995-2011: the gravity model also utilizes sectoral value-added and sectoral output as proxies for the market size. The impact of regional trade agreements (RTAs) is evaluated for 17 WIOD sectors based on the research methodology developed by Baldwin (2006), Flam and Nordstrom (2003) and Fernandes (2006). Contrary to the mentioned research studies, this paper uses a more advanced econometric technique - the Poisson pseudo-maximum-likelihood method displayed in Silva and Tenreyro (2006). This paper concludes that both "deep" and "shallow" trade arrangements have a more pronounced effect on Visegrad high value-added product exports than on Visegrad low value-added product exports. Common Commercial Policy's trade effects on RTAs, for instance in the case of Mexico and Turkey, are comparable to its trade effects with EU countries. The Common Commercial Policy's effect on RTAs is almost absent in low-value-added product sectors of Visegrad countries. Thus, we conclude that integration with the EU influenced Visegrad countries' trade of higher value-added goods with both the EU and non-EU industrialized countries.

Keywords: EU effect, FTA effect, regionalism, sectoral trade, Visegrad
JEL classification: F13, F15

Published: February 1, 2018  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Gauger, I., & Sledziewska, K. (2018). Is a Model of Comprehensive Regionalism Trade-Increasing for V4 Countries? Sectoral Approach. Prague Economic Papers, 27(1), 21-39. doi: 10.18267/j.pep.639
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Akhvlediani, T., Sledziewska, K. (2016). The Impacts of Common Commercial Policy on Export Performances of Visegrad Countries. Prague Economic Papers. Forthcoming, https://doi.org/10.18267/j.pep.593 Go to original source...
    2. Anderson, J. (1979). The Theoretical Foundation for the Gravity Equation. American Economic Review, 69(1), 106-116.
    3. Ambroziak, L. (2011). FDI and Intra-Industry Trade: Theory and Empirical Evidence from the Visegrad Countries. International Journal of Economics and Business Research, 4(1-2), 180-198, https://doi.org/10.1504/ijebr.2012.044252 Go to original source...
    4. Attila, J. A. (2015). Country-and Industry-Specific Determinants of Intra-Industry Trade in Agri-Food Products in the Visegrad Countries. Studies in Agricultural Economics, 117(2), 93-101, https://doi.org/10.7896/j.1514 Go to original source...
    5. Baldwin, R., Taglioni, D. (2006). Gravity for Dummies and Dummies for Gravity Equations. National Bureau of Economic Research, Inc. Cambridge Working Papers No. 12516, https://doi.org/10.3386/w12516 Go to original source...
    6. Baldwin, R., Skudelny, F., Taglioni, D. (2005). Trade Effects of the Euro: Evidence from Sectoral Data. European Central Bank. ECB Working Paper No. 446. Go to original source...
    7. Baldwin, R. (2014). WTO 2.0: Governance of 21st Century Trade. Review of International Organizations, 9(2), 261-283, https://doi.org/10.1007/s11558-014-9186-4 Go to original source...
    8. Bergstrand, J. H. (1990). The Heckscher-Olin-Samuelson Model, the Linder Hypothesis and the Determinants of Bilateral Intra-industry Trade. Economic Journal, 100(403), 1216-1229, https://doi.org/10.2307/2233969 Go to original source...
    9. Bartha, Z., Gubik, A. S. (2014). The Outward Focused Development Path in the Visegrad Countries in D. Kiendl-Wendner and K. Wach K. eds., International Competitiveness in Visegrad Countries: Macro and Micro Perspective. Graz: Fachhochschule Joanneym.
    10. Bartha, Z., Gubik, A. S. (2014). SME Internalisation Index (SMINI) Based on the Sample of the Visegrad Countries in Gubik, A.S., Wach, K. (eds), International Entrepreneurship and Corporate Growth in Visegrad Countries. Mickolc: University of Miskolc, pp. 23-40.
    11. Brodzicki, T. (2011). Structural Adjustments in Trade Relations of the Visegrad Group Countries. Paper presented at the the ETSG Thirteen annual conference.
    12. Durendez, A., Wach, K. (eds.) (2014). Patterns of Business Internationalisation in Visegrad Countries - In Search for Regional Specifics. Cartagena: Universidad Politécnica de Cartagena. ISBN 978-84-942562-0-2.
    13. Fernandes A. (2006). Trade Dynamics and the Euro Effect: Sector and Country Estimates. University of Essex and IPVC. Unpublished.
    14. Flam, H., Nordstrom, H. (2003). Trade Volume Effects of the Euro: Aggregate and Sector Estimates. Institute for International Economic Studies. Unpublished.
    15. Greenaway, D., Milner, C. (2002). Regionalism and Gravity. Scottish Journal of Political Economy, 49(5), 574-585, https://doi.org/10.1111/1467-9485.00249 Go to original source...
    16. Jambor, A. (2013). Comparative Advantages and Specialisation of the Visegrad Countries Agri-Food Trade. Acta Oeconomica et Informatica, 16(1), 22-34, https://doi.org/10.15414/raae.2013.16.01.22-34 Go to original source...
    17. Leamer, E. E. (1992). Wage Effects of a U.S.-Mexican Free Trade Agreement. National Bureau of Economic Research. Working Paper No. 3991, https://doi.org/10.3386/w3991 Go to original source...
    18. Markusen, J. R., Wigle, R. M. (1990). Explaining the Volume of North-South Trade. Economic Journal, 100(403), 1206-1215, https://doi.org/10.2307/2233968 Go to original source...
    19. Leamer, Edward E. (1992). Testing Trade Theory. National Bureau of Economic Research. NBER Working Papers No. 3957, https://doi.org/10.3386/w3957Nasadiuk I., Sledziewska K. How Does Regional Integration Among Countries Influence Trade. Does the Impact Differ among Countries? Argumenta Oekonomika. Manual submitted. Go to original source...
    20. Richter, S. (2012). Changes in the Structure of Intra-Visegrad Trade after the Visegrad Countries. Accession to the European Union (No. 5). The Vienna Institute for International Economic Studies.
    21. Silva, S., Tenreyro S. (2006). The Log of Gravity. The Review of Economics and Statistics, 88(4), 641-658, https://doi.org/10.1162/rest.88.4.641 Go to original source...
    22. Silva, S., Tenreyro S. (2011). Further Simulation Evidence on the Performance of the Poisson Pseudo-Maximum Likelihood Estimator. Economics Letters, 112(2), 220-222, https://doi.org/10.1016/j.econlet.2011.05.008 Go to original source...
    23. Smiech, S., Zysk, W. (2014). The Influence of Foreign Direct Investment on Foreign Trade in the Visegrad Countries from 2001 to 2011. Entrepreneurial Business and Economics Review, 2(3), 7-18, https://doi.org/10.15678/eber.2014.020302 Go to original source...
    24. Toporowski, P. E. (2013). The Steps of Visegrad Countries towards Better Integration within the EU: a Case of Intra-industry Trade. Retrieved: http://www.etsg.org/ETSG2013/Papers/379.pdf
    25. WIOD (2011) World Input-Output Database Retrieved: http://www.wiod.org/new_site/home.htm
    26. WTO (2011). The WTO and Preferential Trade Agreements: From Co-Existence to Coherence. World Trade Report, Retrieved: https://www.wto.org/english/res_e/publications_e/ wtr11_e.htm

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content