Trade, Competition and Productivity

Sammanfattning: This thesis consists of four papers on trade, competition and productivity with particular emphasis on the effects of various aspects of the deepening and widening of the European Union. The first paper Trade Creation, Diversion and Displacement of the EU Enlargement Process provides an assessment of the effects of the EU enlargement process on trade. A new method of estimating the gravity model is used to capture the effects of the gradual trade liberalization and the EU enlargement in 1995. The results indicate that the integration of the Central and Eastern European Countries into the EU has boosted trade within the enlarged EU. The 1995 enlargement, on the other hand, gave rise to trade diversion in imports to Austria, Finland and Sweden at the expense of developing countries. The second paper Assessing the Effects of EU Trade Preferences for Developing Countries (co-authored with Maria Persson, Department of Economics Lund University) uses an improved gravity equation to estimate the effects of EU trade preferences, granted to developing countries, on trade. The preferences were first introduced in the early 60s and have since expanded to cover almost all developing countries, but the scope of preferences varies across groups of countries. The results point to a significant trade creating effect of the preferences, especially for African Caribean and Pacific countries, for whom the preferences have increased export by about 30 %. Moreover, the enlargements of the EU have reduced the propensity of new members to import from developing countries. The third paper Market Power and European Competition in the Swedish Food Industry uses a sample of Swedish firms in the food and beverage industry to study the effects of the Single Market programme and the Swedish EU membership on firms? market power. The results show that firms enjoy some degree of market power, which varies across sectors. The increased real and potential foreign competition has contributed to reducing market power in sectors that were protected by trade barriers prior to Swedish EU membership. The last paper Exports and Productivity of Russian Firms ? In Search of Causality (co-authored with Konstantin Kozlov, CEFIR, Moscow) analyses the relationship between exports and productivity of Russian firms. It is shown that exporters are larger and more productive than non-exporters. This seems to be an effect of more productive firms self-selecting into the export market, rather than the existence of a learning effect from exporting. But there are learning effects among new entrants.