Vujcic, Boris; Sosic, Vedran --- "Trade integration in South-East Europe and the trade potential of Croatia" [2004] ELECD 157; in Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris (eds), "The Economic Potential of a Larger Europe" (Edward Elgar Publishing, 2004)

Book Title: The Economic Potential of a Larger Europe

Editor(s): Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843769620

Section: Chapter 12

Section Title: Trade integration in South-East Europe and the trade potential of Croatia

Author(s): Vujcic, Boris; Sosic, Vedran

Number of pages: 18

Extract:

12. Trade integration in South-East
Europe and the trade potential of
Croatia
Boris Vujci´ and Vedran Sosi´ 1
cc sc

1. INTRODUCTION

In this chapter we investigate the degree of trade integration within the
South-East European (SEE) region and the trade potential of Croatia.
Specifically, we look at Croatia, Bosnia and Herzegovina, Yugoslavia,
Macedonia and Albania, which are all very small economies and which all
used to be `trade isolated', being neither candidates for EU accession nor
CEFTA members in the 1990s.
The trade regime of these countries has in recent years been subject to a
debate among policy makers and academics from both within the region
and the EU, with the discussion focusing on trade liberalization as a means
of enhancing the catching-up process. Yet the discussion has not been very
insightful about `hard facts' on the present level of integration within the
region and its relationship with the EU, and it has not led to a consensus
on how liberalization should proceed.
For the purpose of our analysis, we first present some stylized facts
on Croatian and SEE trade. Second, we analyse the level of trade inte-
gration within the region, using such simple tools as the trade openness
ratio and trade concentration indices. We try to explain why trade devel-
opments in Croatia did not display the canonical transitional behaviour.
Then we run a single-country gravity model to get more insights into the
trade potential of Croatia. Two scenarios are calibrated in order ...