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Free Trade Agreements, Institutions and the Exports of Eastern Partnership Countries

Author

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  • Thorvaldur Gylfason
  • Inmaculada Martínez-Zarzoso
  • Per Magnus Wijkman
Abstract
Following popular protests at home and the fall of the government, Ukraine reversed course and joined Georgia and Moldova in signing Association Agreements in June 2014. This article has two main aims. First, using a gravity model of trade, it estimates the effects of deep and shallow free trade agreements for the EaP (Eastern Partnership) states with Russia and the EU respectively. Second, by relating the outcomes of the first estimation to the quality of institutions, proxied with the level of democracy and the level of corruption in the selected countries, the paper estimates the effect on exports of changes in the quality of institutions. The main results show that the EaP countries gain significantly from free trade agreements with the EU but little if anything from free trade agreements with Russia, and that improvements in the quality of institutions in EaP countries have played an important role in fostering exports.

Suggested Citation

  • Thorvaldur Gylfason & Inmaculada Martínez-Zarzoso & Per Magnus Wijkman, 2015. "Free Trade Agreements, Institutions and the Exports of Eastern Partnership Countries," Journal of Common Market Studies, Wiley Blackwell, vol. 53(6), pages 1214-1229, November.
    • Handle: RePEc:bla:jcmkts:v:53:y:2015:i:6:p:1214-1229
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    File URL: http://hdl.handle.net/10.1111/jcms.12275
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    References listed on IDEAS

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    6. Matteo Fiorini & Bernard Hoekman, 2017. "Economic Governance, Regulation and Services Trade Liberalization," RSCAS Working Papers 2017/27, European University Institute.
    7. Nino Papachashvili & Lela Jamagidze & Nino Melitauri, 2018. "The Analysis of Export Drivers and Impediments Using Extended Gravity Model (The Case of Georgia)," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 69-85, March.
    8. Ion MUȘCHEI, 2019. "The relationship between institutions and trade, empirical analysis from the Republic of Moldova case," Eastern European Journal for Regional Studies (EEJRS), Center for Studies in European Integration (CSEI), Academy of Economic Studies of Moldova (ASEM), vol. 5(2), pages 4-23, December.
    9. Martínez-Zarzoso, Inmaculada & Voicu, Anca M. & Vidovic, Martina, 2020. "Production networks in Europe: A natural experiment of the EU enlargement to the east," University of Göttingen Working Papers in Economics 390, University of Goettingen, Department of Economics.
    10. Ion MUȘCHEI, 2022. "The Causal Relationship Between Institution And Trade. Evidence From The Republic Of Moldova - The European Union," EURINT, Centre for European Studies, Alexandru Ioan Cuza University, vol. 9, pages 182-201, December.
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