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Kiel Institute for World Economics Kiel Working Papers, Kiel Institute for World Economics

No 1088:
European Integration and Changing Trade Patterns: The Case of the Baltic States

Claus-Friedrich Laaser and Klaus Schrader

Abstract: The analysis of Baltic regional trade patterns reveals that during the nineties the Baltic states made significant progress to integrate into the Western European division of labour although a significant share of (transit) trade with Russia remained. In view of this development, history seems to matter with respect to the interwar period and the period of Soviet occupation. In addition, a trade entropy analysis and gravity model estimates show that European integration of the Baltic states has a regional centre of gravity located in the Baltic Sea region. The Baltic trade flows increasingly follow the gravitational forces that generally shape trade relations, while regional integration is still much more important than it is normally the case.

Keywords: Eastern enlargement, regional integration, gravity model, Baltic trade patterns; (follow links to similar papers)

JEL-Codes: F14; F15; N74; (follow links to similar papers)

51 pages, January 2002

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