This paper assesses the impact of market power and multinationality in EU12 manufacturing industries on EU integration in goods trade in the 90ies. An increase in the market concentration exhibits a positive impact on bilateral exports, while an increase in multinationality works in the opposite direction. Both effects are in accordance with the theoretical hypotheses. As a result, goods trade between the member countries was polarised in terms of a relative disintegration.
Integration International Trade Multinational firms Panel econometrics