Politická ekonomie
Politická ekonomie
Prague Economic Papers
University of Economics, Prague

Prague Economic Papers Vol. 27 No. 2

Disappearing Borders in the Visegrad Countries

DOI: https://doi.org/10.18267/j.pep.635

[full text (PDF)]

Adam Markus

The aim of this paper is to evaluate the trade integration process of the Visegrad countries from a special point of view, namely by estimating border effects in the countries. The regressional analysis run with two different estimators (OLS vs. PPML) on two different model specifications suggests that between 1995 and 2011 the V4 countries were integrating continuously into the Single Market of the European Union. The results also show that the size of border effect is fairly sensitive to the estimator and particularly to the specification chosen by the researcher. According to the country-level estimation, Hungary seems to be the most integrated country getting the lowest home bias parameters followed by the Czech Republic, Slovakia and Poland, respectively.

Keywords: border effect, gravity model, market integration, PPML, Visegrad countries

JEL Classification: F14, F15

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