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Accession Countries’ Comparative Advantage in the Internal Market: A Trade and Factor Analysis

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Author Info
Kaitila, Ville () (BOFIT)

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Abstract

We analyse trade between Central and Eastern European (CEE) countries and the European Union during 1993-1998 using three methods. First, we calculate the share of intra-industry trade to determine the extent to which two countries trade in similar products. Second, we calculate similarity indices to determine the extent to which the structure of the exports of two countries is similar to a third country. Third, we calculate the revealed comparative advantage of CEE countries in the EU internal market and analyse the results in a two-dimensional space showing relative labour-skills and capital-intensity. We also depict how the factor intensity of comparative advantage has changed since 1993. With this last approach, we find that the comparative advantage of various CEE countries have developed in quite different directions. Some countries have evolved comparative advantage in industries requiring much skilled labour, while others have moved in the opposite direction. This differentiation is also reflected in degrees of capital intensity. A few CEE countries have not shifted in this two-dimensional space.

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Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 3/2001.

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Length: 49 pages
Date of creation: 18 May 2001
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Handle: RePEc:hhs:bofitp:2001_003

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Keywords: EU; eastern enlargement; comparative advantage; factor intensity;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
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  7. Grosfeld, Irena & Kolenikov, Stanislav & Paltseva, Elena & Sénik-Leygonie, Claudia & Verdier, Thierry, 1999. "Dynamism and Inertia on the Russian Labour Market: A Model of Segmentation," CEPR Discussion Papers 2224, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  8. Solanko, Laura, 2001. "Fiscal competition in a transition economy," BOFIT Discussion Papers 4/2001, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
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  10. Keen, Michael & Marchand, Maurice, 1997. "Fiscal competition and the pattern of public spending," Journal of Public Economics, Elsevier, vol. 66(1), pages 33-53, October. [Downloadable!] (restricted)
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  1. Andrea Zaghini, 2005. "Evolution of trade patterns in the new EU member states," Temi di discussione (Economic working papers) 568, Bank of Italy, Economic Research Department. [Downloadable!]
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