International trade and integration of the European Community: an econometric analysis

The paper contributes to the policy debate on European integration by analyzing intra-Community trade and studying the structural determinants of European competitiveness. Four types of explanatory factors of intra-EC trade are distinguished: (1) factors related to inter-industry trade; (2) factors pertaining to intra-industry trade; (3) factors which reflect natural and policy-induced barriers to trade; and (4) factors reflecting supply constraints. Distinction is drawn between two contrasting factors that favor intra-area trade: those that foster economic welfare and those that hinder a more efficient world division of labor. © 1988.