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Border effects in the enlarged EU area

Manchin, Miriam - Pinna, Anna Maria (2003) Border effects in the enlarged EU area. Working Paper. CRENoS.

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Official URL: http://www.crenos.it/working/pdf/03-01.pdf

Abstract

This paper looks at the issue of border effects in the enlarged European Union. We have considered accession countries of different size and other characteristics, i.e. Hungary, Poland, Bulgaria, Romania, Latvia and Cyprus. We have measured the extent to which internal trade exceeds international trade in a set up where controls for other economic determinants of commerce have been considered. In order to avoid inflated border effects, information at the regional level both for CEECs and EU countries has been used to construct a weighted measure of distance both for between-countries and internal distances. Furthermore, in order to separate border effects from impediments to trade due to technical barriers we look at the extent of border effects for sectors grouped according to the approach adopted by the EU to remove technical barriers in the EU. All distance measures have been found negative and significant for all types of products. The border effect coefficients for the harmonic mean have been found consistently smaller, regardless the relevance of technical barriers. Furthermore distance has also been found to be a slightly smaller impediment when using the effective measure. Checking for the presence of technical barriers to trade, our results suggest that the border effects are the largest for old approach products, where we expect to have the most important technical barrier to trade due to complicated harmonization procedures. The ‘other approach’ category has the smallest border effects, while the ‘mixed approach’ products are in between the two previous categories. Our countries of interest would trade with themselves 221 times more in old approach products, while only 24 times more in other approach products.

Item Type:Technical Report / Working Paper / Project Report (Working Paper)
Publisher:CRENoS
Date:November 2003
Institution:Universita' degli Studi di Cagliari
Divisions:Centri > CRENoS Centro Ricerche Economiche Nord Sud
Subjects:Area 13 - Scienze economiche e statistiche > SECS-P/01 Economia politica
Uncontrolled Keywords:European union, countries, commerce, cefta
ID Code:295
Deposited On:12 Nov 2008 10:51

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