Integration, trade costs and the export behaviour of firms: Empirical evidence on the venables model

Theoretical considerations and empirical evidence presented in this paper clearly indicate that economic integration helps firms in old member countries to augment their exports to the new member states. The increase in the export value is, to a large extent, due to new exporters entering the new markets, and only to a small extent due to an increase in average export value per firm. This effect is stronger for small-scale exporters than for medium- and large-scale exporters. In addition to the other benefits, economic integration appears to be peculiarly beneficial to small firms, as it allows them to access new markets previously closed to them.