Kosovo – EU trade relations: a dynamic panel poisson approach. Issue 27 (9th June 2017)

• Record Type: Journal Article
• Authors: Gashi, Petrit; Hisarciklilar, Mehtap; Pugh, Geoffrey
• Is Part Of: Applied economics. Volume 49:Issue 27(2017)
• Page Start: 2642
• Page End: 2654
• Publication Date: 2017-06-09
• Subjects: Kosovo-EU trade -- gravity model -- dynamic Poisson estimation -- diaspora; F14 -- P33; Economics -- Periodicals; 330
• DOI: 10.1080/00036846.2016.1245836
• Languages: English
• ISSNs: 0003-6846

Abstract

ABSTRACT: To inform policymaking following trade liberalization between Kosovo and the EU within the framework of the Stabilisation and Association Agreement (SAA), we specify a gravity model to investigate Kosovo's trade in goods with 28 EU countries over the period 2005–2013. We reconcile competing methodological requirements by using a dynamic Poisson approach to estimation. Together, persistent trade patterns and an unfavourable combination of demand and supply elasticities suggest that trade liberalization in isolation is not sufficient to promote exports but may need to be incorporated within a wider policy and institutional framework. In addition, our findings suggest that trade costs should be a particular focus for policy: distance has a big negative influence on Kosovo's exports to EU countries; while diaspora communities promote Kosovo's exports to EU markets, most likely because they offset trade costs.