Intra-Regional Trade in Transitional Economy: Prospects from South-Eastern Europe
Intra-Regional Trade in Transitional Economy: Prospects from South-Eastern Europe

Summary/Abstract: This paper addresses the issue of foreign trade of South-Eastern European Transitional Economies, focusing in their intra-regional trade. International trade is crucially related to the development of the region, which is why it is important to centre our attention on the variables that affect trade. Augmented gravity models were introduced to observe the trade patterns of the region for the period before the financial crisis and before the changing pattern of any of the Balkan countries towards the European Union. The gravity equation has been found to be efficient in explaining trade pattern of the region. At the same time, other variables testing the significance of historical, cultural, and political ties on trade have been found also to be important. South-Eastern European Transitional Economies have to work individually and together in achieving political stability in the region, in order to improve their bilateral trade relationships.

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