@techreport{c7f7b30893014edc8d8af827fbd26c6d,
title = "The Euro Effect on Bystanders",
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.",
keywords = "euro, trade diversion, exports, heterogeneous firms",
author = "Joakim Gullstrand and Karin Olofsdotter",
year = "2014",
language = "English",
series = "Working Papers",
publisher = "Lund University, Department of Economics",
number = "2014:33",
type = "WorkingPaper",
institution = "Lund University, Department of Economics",
}