Is there potential for growth in Cuban exports to the EU? : a gravity model approach

Abstract: Cuba has since the fall of the Soviet Union been running large trade deficits and its government has urged the Cuban firms to become more export oriented. This thesis aims to examine the Cuban export potential towards its largest export markets in the EU. A gravity model is estimated using panel data for the years 2010 to 2014 containing exports from developing countries towards the 35 OECD members. The results suggest that, overall, there is room for growth in Cuban exports towards the EU. However, the results should be taken into account with caution due to the limitations of the thesis. It could prove difficult for Cuba to reach its full potential in the EU market due to current political situations and trade barriers.