This project evaluates the impact of the EU-Ukraine Deep and Comprehensive Free Trade Agreement (DCFTA) on trade flows using a dynamic gravity difference-in-difference regression model. The analysis constitutes the basis of a report prepared by the National Board of Trade Sweden. I researched and wrote the report, and this repository contains all scripts required to reproduce the main analysis.
Full Report: Read the Report (PDF)
- Data Sources: The dataset consists of bilateral trade data (exports) obtained from UNCOMTRADE and gravity variables (e.g., GDP, distance, language, colonial ties) obtained from CEPII.
- Regression Model: Implements a Dynamic Difference-in-Difference Gravity Regression using a Poisson Pseudo-Maximum Likelihood (PPML) estimator.
- Treatment Group: All exporter-importer pairs that can be formed between Ukraine and EU members.
- Matching: The treatment group is matched to a control group of similar exporter-importer pairs using Coarsened Exact Matching (CEM).
- Visualization: Plots coefficient estimates over time to illustrate the impact of the trade agreement as its implementation progresses.
Clone the repository and open the .Rproj file in RStudio.
Install required R packages:
install.packages(c("dplyr", "readr", "tidyr", "penppml", "ggplot2"))