Production Networks in Europe: A Natural Experiment of the EU Enlargement to the East

• • 
  • Presentation speakers
    • Inmaculada Martínez-Zarzoso, Georg-August University of Göttingen and University Jaume I
    • Anca M. Voicu, Rollins College, Florida, USA
    • Martina Vidovic, Rollins College, Florida, USA
  • Download presentation
    • Inma Martinez Zarzoso-Anca Voicu and Martina Vidovic-Production Networks in Europe-A Natural Experiment of the EU Enlargement to the East.pdf

  Abstract:

  This paper focuses on the 2004 enlargement of the European Union to the East and treats it as a natural experiment to investigate two issues:first, whether there has been a trade creation effect in final and intermediate goods and second, to what extent this effect has been more pronounced for final or for intermediate goods. Using difference-in-difference analysis, we find that the effect of 2004 EU enlargement has been positive for both intermediate and final goods. Indeed, after controlling for the multilateral resistance and bilateral time-invariant factors, we estimate an increase in bilateral trade of 90% for final goods and 40% for intermediates.

 

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