difficult as these countries (except Albania) do not have national input-output tables.

# **3.2 Data: Description and Sources**

To perform the empirical analysis, we employ a newly constructed dataset, The International Trade and Production Database for Estimation (ITPD-E), which is developed and maintained by the U.S. International Trade Commission (ITC), c.f., Borchert et al. (2021 _a_ ). The original ITPD-E consists of inter- and intra-national trade flows for 243 countries and 170 industries for the years between 2000 and 2016.<sup>14</sup> The inclusion of domestic trade flows in the ITPD-E is a crucial feature for the implementation of our methods. Another very important feature of the ITPD-E with respect to our purposes is that it covers all EU countries and all CEFTA economies (except for Kosovo) as well. This is an advantage over other databases, e.g., WIOD and the GTAP datasets, which are widely used for general equilibrium counterfactual analysis. However, neither WIOD nor GTAP covers the CEFTA countries. Albania is an exception.

Given the methodological purpose of our paper, and for computational and expositional purposes too, we make several choices regarding the dimensions of the ITPD subsample that we employ for our analysis. First, we focus on 2013, which is the latest year that allows most comprehensive coverage across most countries and across most sectors. In the robustness analysis, which we report in the Supplementary Appendix, we reproduce our estimates with panel data over the period 2000-2016, and the panel estimates confirm the robustness of our main findings. On the country dimension, we limit the analysis to cover one hundred and four (104) economies, which include the fifty (50) largest exporters in each ITPD-E industry as well as all EU economies and CEFTA countries.<sup>15</sup> 14Of the 170 sectors in ITPD, 26 are in Agriculture, 7 are in Mining and Energy, 120 are in Manufacturing, and 17 are in Services. For further details on ITPD, we refer the reader to Borchert et al. (2021 _a_ ), and for its use for gravity estimations see Borchert et al. (2021 _b_ ).

> 15The countries in our sample are: Angola (AGO), Albania (ALB), United Arab Emirates (ARE), Argentina (ARG), Australia (AUS), Austria (AUT), Azerbaijan (AZE), Belgium (BEL), Bangladesh (BGD), Bulgaria (BGR), Bahrain (BHR), Bosnia and Herzegovina (BIH), Belarus (BLR), Bolivia (BOL), Brazil (BRA), Brunei (BRN), Canada (CAN), Switzerland (CHE), Chile (CHL), China (CHN), the Republic of Congo (COG), Colombia (COL), Costa Rica (CRI), Cyprus (CYP), Czech Republic (CZE), Germany (DEU), Denmark (DNK), Algeria (DZA), Ecuador (ECU), the Arab Republic of Egypt (EGY), Spain (ESP), Estonia (EST), Ethiopia (ETH), Finland (FIN), France (FRA), Gabon (GAB), United Kingdom (GBR), Ghana (GHA), Equatorial Guinea (GNQ), Greece (GRC), Hong Kong SAR, China (HKG), Croatia (HRV), Hungary (HUN), Indonesia (IDN), India (IND), Ireland (IRL), the Islamic Republic of Iran (IRN), Iraq (IRQ), Israel (ISR), Italy (ITA), Jordan (JOR), Japan (JPN), Kazakhstan (KAZ), Kenya (KEN), Cambodia (KHM), the Republic of Korea (KOR), Kuwait (KWT), Libya (LBY), Sri Lanka (LKA), Lithuania (LTU), Luxem-

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