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

Prague Economic Papers Vol. 27 No. 6

Do Free Trade Regimes and Common Currency Drive Export Growth?

DOI: https://doi.org/10.18267/j.pep.663

[full text (PDF)]

Mindaugas Butkus, Henrikas Karpavičius, Kristina Matuzevičiūtė

It is believed that in many countries export activities could enhance countries’ capabilities. It is also believed that trade liberalization or common currency could be an export driver. This paper examines the impact of trade liberalization and common currency on EU countries’ export growth. The methodology applied in this research is constructed using specifics of the data that arise from a natural experiment. We examined how exogenous events like joining the EU, WTO, EFTA or becoming a member of Eurozone change the environment, in which countries trade. The results using an unbalanced panel data consisting of 28 EU countries for the period 1995–2015 revealed that membership in WTO instantly increases export by 12.5–13.5%, but has no extra effect in longer period; membership in the EU and EFTA has effect on export with a time lag and common currency did not affect export growth at all.

Keywords: common currency, export growth, trade regimes

JEL Classification: F13, F40, F42

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