A fast, easy, and efficient estimator for the trade flux between heterogeneous economies

Compared to time-series or cross-section analyses, panel data allow us to control for individual specific characteristics - possibly unobservable - which may be correlated with certain explanatory variables in the specification of an economic relationship. Not controlling for unobservables leads to obtaining biased results. After controlling for such unobservable characteristics, we calculate efficient estimates of a trade flux equation between heterogeneous economies.international trade; POLS estimators; individual heterogeneity; fixed effects; random effects

The Endogeneity of Association Agreements and their Impact on Trade for Eastern Countries: Empirical Evidence for Romania

The main goal of regionalization is the creation of free trade areas and the guarantee for countries to accede to a widened market. Many studies dealing with the effects of regional free trade agreements on trade flows already exist in the economic literature and the explosion of regional agreements among nations has recently stressed the key role of regionalization. However, the effects of agreements on trade have not yet been clearly determined in those studies. Our research in this paper aims at reassessing the genuine role of associations. For this matter, we particularly study the association of Romania with European Union countries. Our econometric analysis based on qualitative choice models highlights in particular why European countries chose to conclude an association agreement with Romania, and stresses the fact that European Union countries select endogenously the conclusion of association agreements. We also find a 0.29 positive impact of the association agreement on Romanian export performances.http://deepblue.lib.umich.edu/bitstream/2027.42/57248/1/wp868 .pd

The Endogeneity of Association Agreements and their Impact on Trade for Eastern Countries: Empirical Evidence for Romania

The main goal of regionalization is the creation of free trade areas and the guarantee for countries to accede to a widened market. Many studies dealing with the effects of regional free trade agreements on trade flows already exist in the economic literature and the explosion of regional agreements among nations has recently stressed the key role of regionalization. However, the effects of agreements on trade have not yet been clearly determined in those studies. Our research in this paper aims at reassessing the genuine role of associations. For this matter, we particularly study the association of Romania with European Union countries. Our econometric analysis based on qualitative choice models highlights in particular why European countries chose to conclude an association agreement with Romania, and stresses the fact that European Union countries select endogenously the conclusion of association agreements. We also find a 0.29 positive impact of the association agreement on Romanian export performances.Regionalization, European integration, Qualitative choice models, Probit

Modeling International Trade Flows between CEEC and OECD Countries

This article deals with econometric developments for the estimation of gravity model, which allow to get convergent parameter estimates even when a correlation exists between the explanatory variables and the specific unobservable characteristics of each individual. We implement panel data econometric techniques to characterize bilateral trade flows between heterogeneous economies. Our econometric results based on a sample of 4 Central and Eastern European countries (CEEC-4) and 19 OECD countries over a 18-year period highlight the importance by taking into account the unobservable heterogeneity to obtain a robust empirical specification and unbiased coefficients.gravity models, unobservable heterogeneity, panel data models, international trade flows

Trade Specialisation and Economic Convergence: Evidence fro Two Eastern European Countries

This paper analyses trade specialisation dynamics in two Eastern European countries (Romania and Bulgaria - EEC-2) vis-à-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.http://deepblue.lib.umich.edu/bitstream/2027.42/64390/1/wp959.pd

POLLUTION ABATEMENT AND CONTROL EXPENDITURE IN ROMANIA: A MULTILEVEL ANALYSIS

The transition process in Central and Eastern Europe was associated with growing environmental awareness. This paper analyses the determinants of Pollution Abatement and Control Expenditure (PACE) at plant level in the case of Romania using survey data and a Multilevel Regression Model (MRM). Our findings suggest that, although Romania has improved its environmental performance, formal and informal regulation are still only partially developed due to the difficulties of economic transition, and heterogeneity across regions remains considerable.Pollution Abatement and Control Expenditure, Transition Economy, Multilevel Regression Model (MRM)

Corporate Social Responsibility and its Macroeconomic Implications

One of main concern of policy makers is pollution and hence the improvement of the environmental quality. The implementation of environment policies aims at improving life and product quality in order to replace those obtained by high polluting processes by less polluting ones. Countries having more strict environmental regulations are likely to suffer from a significant increase of their production costs. As a consequence these countries become less competitive on the international market and may lose their market share. In this context, an increasing attention was granted to the impact of environment policies on foreign trade. Our purpose in this paper is to investigate whether Corporate social responsibility introduced into Eastern European countries have led or not to a decline of exports towards the European Union (EU), and if so how much? This question is important since it is related to the preoccupation of EU new members to increase their exports and the quality of their products. Our econometric methodology based on recent developments of panel data techniques allow us to control for unobservable heterogeneity and hence to get robust empirical robust. Our results highlight a moderated impact of environmental regulations on foreign trade.environmental regulations; trade policy; gravity equation; competitiveness.

DETERMINANTS OF POLLUTION ABATEMENT AND CONTROL EXPENDITURE: EVIDENCE FROM ROMANIA

The aim of the present study is to shed some light on the factors affecting Pollution Abatement and Control Expenditure (PACE) in the context of a transition economy such as Romania, in contrast to the existing literature which mostly focuses on developed economies. Specifically, we use survey data of the Romanian National Institute of Statistics and estimate Multilevel Regression Model (MRM) to investigate the determinants of environmental behaviour at plant level. Our results reveal some important differences vis-à-vis the developed countries, such as a less significant role for collective action and environmental taxes, which suggests some possible policy changes to achieve better environmental outcomes.Pollution Abatement and Control Expenditure, Transition Economy, Multilevel Regression Model (MRM)

Determinants of Pollution Abatement and Control Expenditure: Evidence from Romania

The aim of the present study is to shed some light on the factors affecting Pollution Abatement and Control Expenditure (PACE) in the context of a transition economy such as Romania, in contrast to the existing literature which mostly focuses on developed economies. Specifically, we use survey data of the Romanian National Institute of Statistics and estimate Multilevel Regression Model (MRM) to investigate the determinants of environmental behaviour at plant level. Our results reveal some important differences vis-‡-vis the developed countries, such as a less significant role for collective action and environmental taxes, which suggests some possible policy changes to achieve better environmental outcomes.http://deepblue.lib.umich.edu/bitstream/2027.42/64412/1/wp945.pd

Europe Agreements and Trade Balance: Evidence form Four New EU Members

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 analyse the effects of the agreement variable. Our estimation results indicate a positive and significant impact of EA on trade flows. However, there is an asymmetric impact of the agreement variable on the trade balance, exports and imports being affected in different ways, which results in a trade balance deficit in the CEEC-4.regionalisation, trade flows, trade balance, panel data methods