Liberalization of Trade with Leading Trade Partners: Some Evidence from Bosnia and Herzegovina

In this study, the effect of trade liberalization with the leading trade partners on the B&H trade balance was researched. The theoretical framework includes a gravity model and econometric technique GMM dynamic panel. The research results have shown that export of products from B&H increased thanks to the growth of macroeconomic indicators of trading partners, dummy variables and the export of certain products according to the sector structure. On the other hand, imports of products in B&H decreased due to the decline of macroeconomic indicators of B&H, dummy variables and reduced imports of certain products according to the sector structure.