The Impact of EU Accession of Selected CEECs on Bilateral Economic Relations with the EU. A Dynamic Gravity Approach

Abstract

A dynamic panel data approach was applied in order to evaluate the impact of EU accession of selected Central and Eastern European countries on their bilateral economic relations in terms of trade and FDI with the EU member states. Assuming the accession for 2005 and taking projections for the GDPs of the CEECs in the case of accession and non-accession, we obtain the following results in real terms by our model simulation: Bilateral exports by the average EU country to the selected CEECs increase by an additional ½ percent p.a. The effect on the growth rate of outward stocks of FDI is about triple that figure (+1½ percent p.a.).

The Impact of EU Accession of Selected CEECs on Bilateral Economic Relations with the EU. A Dynamic Gravity Approach