The Euro Effect on Bystanders
(2014) In Working Papers- Abstract
- This paper investigates trade effects of the euro focusing on the impact on bystanders. A common currency is expected to lower both variable and fixed trade costs, inducing increased trade flows between currency-union members on both intensive and extensive margins of trade. While this trade-creating effect has gained attention in recent work using firm-level data, few studies have looked on the possible trade-diverting effect for firms remaining outside. In this paper, we use data for Swedish manufacturing firms covering the 1997-2006 period in order to assess the potential trade-diverting effects of the euro on Swedish exports. We consider variations in the impact of the euro taking both firm, industry and export-market characteristics... (More)
- This paper investigates trade effects of the euro focusing on the impact on bystanders. A common currency is expected to lower both variable and fixed trade costs, inducing increased trade flows between currency-union members on both intensive and extensive margins of trade. While this trade-creating effect has gained attention in recent work using firm-level data, few studies have looked on the possible trade-diverting effect for firms remaining outside. In this paper, we use data for Swedish manufacturing firms covering the 1997-2006 period in order to assess the potential trade-diverting effects of the euro on Swedish exports. We consider variations in the impact of the euro taking both firm, industry and export-market characteristics into account. Our results suggest that there are some trade-diverting effects on the intensive margin but that these negative effects of the euro on trade flows are asymmetric and only valid for core markets within the Eurozone. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/4698343
- author
- Gullstrand, Joakim LU and Olofsdotter, Karin LU
- organization
- publishing date
- 2014
- type
- Working paper/Preprint
- publication status
- published
- subject
- keywords
- euro, trade diversion, exports, heterogeneous firms
- in
- Working Papers
- issue
- 2014:33
- pages
- 23 pages
- language
- English
- LU publication?
- yes
- id
- c7f7b308-9301-4edc-8d8a-f827fbd26c6d (old id 4698343)
- alternative location
- https://ideas.repec.org/p/hhs/lunewp/2014_033.html
- date added to LUP
- 2016-04-04 12:12:02
- date last changed
- 2024-10-14 14:56:18
@misc{c7f7b308-9301-4edc-8d8a-f827fbd26c6d, abstract = {{This paper investigates trade effects of the euro focusing on the impact on bystanders. A common currency is expected to lower both variable and fixed trade costs, inducing increased trade flows between currency-union members on both intensive and extensive margins of trade. While this trade-creating effect has gained attention in recent work using firm-level data, few studies have looked on the possible trade-diverting effect for firms remaining outside. In this paper, we use data for Swedish manufacturing firms covering the 1997-2006 period in order to assess the potential trade-diverting effects of the euro on Swedish exports. We consider variations in the impact of the euro taking both firm, industry and export-market characteristics into account. Our results suggest that there are some trade-diverting effects on the intensive margin but that these negative effects of the euro on trade flows are asymmetric and only valid for core markets within the Eurozone.}}, author = {{Gullstrand, Joakim and Olofsdotter, Karin}}, keywords = {{euro; trade diversion; exports; heterogeneous firms}}, language = {{eng}}, note = {{Working Paper}}, number = {{2014:33}}, series = {{Working Papers}}, title = {{The Euro Effect on Bystanders}}, url = {{https://lup.lub.lu.se/search/files/195210681/WP14_33.pdf}}, year = {{2014}}, }