Evolution of trade patterns in the new EU member states
AbstractThe paper analyses the most recent evolution of the trade specialisation pattern in the 10 new EU Member States. Relying on the empirical approach of the Markov transition matrices it analyses both the changes in the external shape of the distribution of comparative advantages and the intra-distribution dynamics. The new Members show an indeed dynamic trade pattern; they were able to gain comparative advantages relatively fast in sectors in which they were lagging behind at the beginning of the transition process, notably in some Â“high techÂ” products. In addition, many specialisation improvements occurred in those items for which the world demand expands at the fastest rate, hinting to the possibility of an increase in their trade shares on world markets. Both findings can be explained by the initial need to rebuild and modernise the entire capital stock, the significant skilled-labour force endowment, and the large FDI inflows that allowed them to skip intermediate states of technological development.
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Bibliographic InfoPaper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 568.
Date of creation: Nov 2005
Date of revision:
Revealed comparative advantages; international specialization model; distribution dynamics;
Other versions of this item:
- Andrea Zaghini, 2005. "Evolution of trade patterns in the new EU member states," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(4), pages 629-658, October.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F15 - International Economics - - Trade - - - Economic Integration
- E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-01 (All new papers)
- NEP-EEC-2006-01-01 (European Economics)
- NEP-INT-2006-01-01 (International Trade)
- NEP-TRA-2006-01-01 (Transition Economics)
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