The Effects of EU-membership : How distance and borders have been affected by the EU-membership and the effects on Swedish trade with the EU14

Abstract: This bachelor thesis investigates how distance and borders have been affected by the EU-membership and what effect it had on Swedish trade with the EU14. By comparing the time periods 1980-1994 (before the entry) and 1995-2009 (after the entry), it is possible to see changes in trade. Three commodity groups important for Swedish trade were analysed in order to see the effects of the EU-membership. The chosen commodity groups are; (i) Chemicals and related products, nes. (ii) Machinery and transport equipment (iii) Crude materials, inedible, except fuels. By modifying the original gravity model to fit our purpose and use it for regression analysis, the results are interpreted using trade theories. OLS-regressions were run, using five variables known to have an impact on trade.  The Grubel-Lloyd index was used to analyse the level of intra-industry trade, for the chosen commodity groups, it was shown that the trade patterns did not change drastically after the EU-membership. The regression results also showed that some variables became less important for trade after the membership. Sectors were affected in different ways and it is assumed that other factors became more important for trade after the EU-membership such as sharing policies and regulations.