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Does political disintegration lead to trade disintegration?
Evidence from transition countries1

Does political disintegration lead to trade disintegration?
Evidence from transition countries1 Recent studies have found that political disintegration is a cause of severe and rapid trade disintegration in former Eastern European countries. This finding somewhat conflicts with another strand of the literature highlighting the fact that trade patterns change relatively slowly. This article aims at reconciling the apparent inconsistency between these two results. Using a theoretically grounded gravity equation, we evaluate the intensity of trade between successor states of three former countries (Czechoslovakia, the Soviet Union and Yugoslavia) in the period 1993–2001. We find no clear evidence that political disintegration leads to systematic and severe trade disintegration. This result is consistent with the patterns displayed by using simple descriptive statistics, is robust to sensitivity checks, and supports the idea of hysteresis in trade. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Economics of Transition and Institutional Change Wiley

Does political disintegration lead to trade disintegration?
Evidence from transition countries1

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References (48)

Publisher
Wiley
Copyright
Copyright © 2007 Wiley Subscription Services, Inc., A Wiley Company
ISSN
2577-6975
eISSN
2577-6983
DOI
10.1111/j.1468-0351.2007.00310.x
Publisher site
See Article on Publisher Site

Abstract

Recent studies have found that political disintegration is a cause of severe and rapid trade disintegration in former Eastern European countries. This finding somewhat conflicts with another strand of the literature highlighting the fact that trade patterns change relatively slowly. This article aims at reconciling the apparent inconsistency between these two results. Using a theoretically grounded gravity equation, we evaluate the intensity of trade between successor states of three former countries (Czechoslovakia, the Soviet Union and Yugoslavia) in the period 1993–2001. We find no clear evidence that political disintegration leads to systematic and severe trade disintegration. This result is consistent with the patterns displayed by using simple descriptive statistics, is robust to sensitivity checks, and supports the idea of hysteresis in trade.

Journal

Economics of Transition and Institutional Change – Wiley

Published: Oct 1, 2007

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