Essays in economic integration

Examining the factors creating barriers to economic integration and therefore limiting the benefits of increased economic links has been an important research program of trade economists. This doctoral thesis contributes to this literature by looking at obstacles to the European Union's external trade and investment relations. The different chapters of the thesis look at different types of integration within and between different geographical areas, such as the EU, Central and Eastern European Countries, OECD and African, Caribbean and Pacific (ACP) countries. The thesis concentrates in particular on trade and foreign direct investment using an empirical approach. All the chapters consider issues which are relevant for designing appropriate policy frameworks aimed at enhancing economic integration and development. The main findings of the thesis show that technical and administrative barriers, rules of origin, and badly designed regulatory and legal environment create obstacles to integration and investment. Moreover economic integration between two regions can be achieved only in a very limited manner via free trade agreements which only imply tariff reductions. The results obtained suggest possible ways for improving policy design in these areas. The first chapter is an introduction presenting the objectives of the thesis and providing an overview of the topics to be discussed in the remaining chapters. The second chapter looks at barriers to trade and the level of integration between the EU and Central Eastern European Countries. More specifically, the chapter examines whether technical barriers to trade influences border effects. The third chapter assesses the effects of a future Free Trade Agreement (FTA) between the enlarged EU and Russia. This is an issue which has immediate policy relevance, since after Russia would join the WTO the EU might consider offering an FTA to Russia. The fourth chapter looks at the level of integration between economies in the EU through examining the determinants of European cross-border M&As focusing on the role of laws and regulations across countries. Moreover, it also looks at the “euro-effects” on M&A, i.e. whether there has been a more intense merger and acquisition activity within euro-zone countries after the introduction of the euro. The fifth chapter of the thesis looks at a group of ACP countries' preferential trade with the EU. The objective is to explain the determinants of preferential exports of ACP countries towards the EU and to assess the impact of preferences on trade volumes. The existence of a threshold in the offered duty reduction under which traders have no incentives to ask for preferences is also investigated.