Is Greece's export performance really low?

Abstract

This paper attempts to access whether Greece’s low openness is the result of its low trade integration, particularly reflecting the country’s relatively poor goods export performance. The analysis estimates potential trade flows for Greece for the years 1993, 1998, 2003 and 2007. In particular, it relies on a gravity model using a panel of cross-country data, which cover bilateral trade flows among the EU member-states. The potential flows are then derived by applying the estimated parameters to the Greek economy. The results show that actual Greek exports fall short of potential ones, while the opposite is true with respect to imports. This becomes more profound when the extent of intra-industry trade is included in the analysis. The findings for the Greek exports differ considerably from the corresponding ones for Portugal, a country with similar characteristics, manifesting the limited convergence of Greece’s trade patterns towards the EU average as well as its unique geographical location relatively to the other EU countries.

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