@techreport{Caetano2002Eastward,
abstract = {The objective of this study is to examine recent developments in trade and FDI flows
between the EU and the CEEC, trying to anticipate future consequences from the economic
integration of the two blocks. Economic theory suggests that integration conveys positive
effects upon welfare, due to the reallocation of resources and the restructuring of production
and trade. The Eastern enlargement represents both an opportunity and a risk for the EU
members as well as for the CEEC. As a result of the differences in size between the two
groups of countries involved, it is likely that on average the CEEC will face the highest risks
but may also experience the largest benefits. It is expected that both trade and FDI flows will
increase with deeper economic integration. However, the free circulation of goods, services
and capital over a wider geographic area creates opportunities for the exploitation of scale
economies, which may lead to the geographical concentration of production. Therefore, in
spite of the expected positive global effects, it is acknowledged that, during the transition
period, difficulties may arise in those sectors, regions and firms confronted with new
competitive challenges.
In the CEEC, transition from centrally planned to market economies coexists with the plans
for future integration in the EU. Both processes prompt internal and external liberalisation
processes, with social and economic consequences that are difficult to predict. In order to
develop a coherent study in such a complex context, an attempt is made to integrate different
analytical perspectives.
The exhaustive assessment of the changes in the pattern of trade between candidates and
current EU members comprehends an analysis of the global intensity of trade flows and of
potential trade creation and diversion effects. The study also examines tendencies for sectoral
specialisation and the evolution of the position of countries in the process of international
segmentation of production. In respect to FDI, an empirical assessment of its main
determinants is followed by the evaluation of potential diversion of investment flows from
the EU periphery to the CEEC.},
author = {Jos\'{e} Manuel Martins Ca\'{e}tano and Aurora Galego and Elsa Cristina Vaz and Carlos Vieira and Isabel Vieira},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {F17; F15; 330; Trade and FDI; Economic Integration; EU-Erweiterung; Europ\"{a}ische Wirtschafts- und W\"{a}hrungsunion; Aussenwirtschaft; Internationale Arbeitsteilung; Intraindustrieller Handel; Direktinvestition; Sch\"{a}tzung; Osteuropa; EU-Staaten},
language = {eng},
number = {7},
title = {The Eastward Enlargement of the Eurozone Trade and FDI},
type = {Ezoneplus working paper},
url = {http://hdl.handle.net/10419/22122},
year = {2002}
}
