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The Determinants of EU Processing Trade
Author(s) -
Egger Hartmut,
Egger Peter
Publication year - 2005
Publication title -
world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/j.1467-9701.2005.00679.x
Subject(s) - factor endowment , economics , endowment , international economics , international trade , gravity equation , panel data , trade barrier , gravity model of trade , bilateral trade , comparative advantage , econometrics , philosophy , epistemology , law , political science , china
This paper assesses the determinants of European outward and inward processing trade. Thereby, it distinguishes between size, relative factor endowment, (other) cost factors and infrastructure variables. Using a large panel of bilateral processing trade flows of the EU12 countries at the aggregate level over the period 1988–1999, we find that infrastructure variables, relative factor endowments and other cost variables are important determinants for the EU's outward processing trade. Costs also play a key role for the EU's inward processing trade.