Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307331 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11401
Publisher: 
CESifo GmbH, Munich
Abstract: 
We examine the effects of World Uncertainty and Geopolitical Risk on Trade flows for 31 European economies between 1995 and 2023. To do so, we resort to Panel estimation techniques, including OLS and Poisson Pseudo Maximum Likelihood (PPML). Our findings reveal that European nations primarily respond to global uncertainty by concentrating their exports and imports among top trading partners particularly their top 5 highest trading partners. This result is more pronounced when uncertainty is driven by low-income countries. Moreover, there is a stronger relationship between imports and global uncertainty compared to exports. Our study underscores the importance of European economies strategically adapting their export and import approaches in response to these challenges.
Subjects: 
geopolitical risk
world uncertainty
trade flows
international trade
European economies
JEL: 
C23
E44
F14
F41
F62
Document Type: 
Working Paper
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