Original scientific paper
https://doi.org/10.18045/zbefri.2016.1.11
The role of regional economic integrations for trade margins: A case of Croatia
Katja Zajc Kejžar
orcid.org/0000-0003-1360-6899
; Faculty of Economics,University of Ljubljana, Ljubljana, Slovenia
Črt Kostevc
; Faculty of Economics, University of Ljubljana, Ljubljana, Slovenia
Vinko Zaninović
orcid.org/0000-0002-2094-0687
; Faculty of Economics, University of Rijeka, Rijeka, Croatia
Abstract
The goal of this investigation is to research the development of intensive and
extensive trade margins on product-country level data for Croatia during the
period 2000–2012. Hypothesis of our paper is that RTAs-induced trade
liberalization will have heterogeneous effects on particular product groups with
indirect implications on national welfare. Static and dynamic gravity trade models
are used on panel data accounting for over 90% of total trade during the observed
period. Estimations of the trade gravity model and trade margins showed that
while SAA and CEFTA arrangements positively affected different measures of
intensive and extensive trade margins, specially exports and imports of
consumption products, effects on trade in intermediate and capital goods were
relatively subdued. This suggests a tendency for market-seeking rather than
efficiency-seeking behaviour of Croatia’s trade sector. When comparing the results
for two trade agreements using dynamic model, we find that SAA primarily affected
trade in consumption goods while effects of CEFTA are more evenly dispersed
across different product groups. Main conclusion of the paper is that Croatia’s
policy makers should try to keep the preferential status of Croatia within the
CEFTA market in the medium term, focusing on the Croatian economy
Keywords
Trade margins; gravity model; free trade agreements; Croatia
Hrčak ID:
160701
URI
Publication date:
27.6.2016.
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