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Accession countries' comparative advantage in the internal market: A trade and factor analysis

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  • Kaitila, Ville

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.

Suggested Citation

  • Kaitila, Ville, 2001. "Accession countries' comparative advantage in the internal market: A trade and factor analysis," BOFIT Discussion Papers 3/2001, Bank of Finland Institute for Emerging Economies (BOFIT).
    • Handle: RePEc:zbw:bofitp:bdp2001_003
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    1. repec:oup:ecpoli:v:12:y:1997:i:24:p:125-176 is not listed on IDEAS
    2. Grubel, Herbert G & Lloyd, P J, 1971. "The Empirical Measurement of Intra- Industry Trade," The Economic Record, The Economic Society of Australia, vol. 47(120), pages 494-517, December.
    3. repec:zbw:bofitp:1999_008 is not listed on IDEAS
    4. H. G. Grubel & P. J. Lloyd, 1971. "The Empirical Measurement of Intra‐Industry Trade," The Economic Record, The Economic Society of Australia, vol. 47(4), pages 494-517, December.
    5. Richard E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 12(24), pages 125-176.
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    Cited by:

    1. Algieri, Bernadina, 2004. "Trade specialisation patterns: the case of Russia," BOFIT Discussion Papers 19/2004, Bank of Finland Institute for Emerging Economies (BOFIT).

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