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Competitiveness, Trade with the EU and Labour Markets: Challenges for the Western Balkans

Author

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  • Botrić Valerija

    (Senior Research Associate, The Institute of Economics, Zagreb, Croatia)

  • Broz Tanja

    (Research Associate, The Institute of Economics, Zagreb, Croatia)

Abstract

This paper focuses on the relationship between exporting and the labour markets of the Western Balkan economies within a macroeconomic and microeconomic framework. Within the macroeconomic framework we investigate the Western Balkan countries’ evolution of the bilateral intra-industry trade share with European Monetary Union members and compare this with the differences in bilateral unit labour cost dynamics. The microeconomic analysis rests on enterprise-level cross section data collected during the crisis period and investigates whether exporters help to create additional jobs in the region in comparison to entrepreneurs oriented towards national market. The results show that trade patterns between Western Balkan economies and EMU trading partners did not exhibit any significant changes in trend. On the other hand, it seems that during the recession period most Western Balkan economies adjusted their unit labour costs, probably in order to boost competitiveness. Microeconomic analysis revealed that, although there are some positive differences between exporters and non-exporters, exporters do not create additional employment.

Suggested Citation

  • Botrić Valerija & Broz Tanja, 2016. "Competitiveness, Trade with the EU and Labour Markets: Challenges for the Western Balkans," South East European Journal of Economics and Business, Sciendo, vol. 11(2), pages 20-32, December.
    • Handle: RePEc:vrs:seejeb:v:11:y:2016:i:2:p:20-32:n:2
    DOI: 10.1515/jeb-2016-0008
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    intra-industry trade; labour market; Western Balkan countries;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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