Economic Cooperation between the Republic of Serbia and the Member States of the Visegrad Group

Abstract

The paper analyses the effects and measures the intensity of economic cooperation that Serbia has achieved with the member countries of the Visegrad Group (V4 Group) from 2000 until today. The starting hypothesis is that the common cultural and historical heritage, the geographical proximity of the market and the common experience of the economic transition process can be an incentive for the development of economic cooperation between Serbia and the countries of the V4 Group. A gravity econometric model Poisson Pseudo Maximum Likelihood (PPML) estimator was used to test the hypothesis. The results of the research confirm a significantly positive impact of the GDP of Serbia and the observed countries, a significantly negative impact of distance and a significantly positive effect of the neighbourhood on bilateral trade flows. Predictors related to the quality of institutions also have a significant positive effect on increasing bilateral trade cooperation between Serbia and the V4 Group.