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The determinants of service exports from Central and Eastern Europe

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  • Ivan T. Kandilov
  • Thomas Grennes

Abstract

The transition economies of Central and Eastern Europe (CEE) have become important exporters of many types of services to Western Europe. We identify the sources of CEE's advantages over competing exporters, such as India, China and Brazil, using disaggregated data on service exports and a novel estimation technique for the gravity equation. Our results indicate that the importance of geographical distance varies substantially across types of service exports. Geography is important for exports of construction services, but it has a negligible impact on computer-related services. However, the relative quality of legal institutions influences trade across a broad range of service categories. The results demonstrate that aggregating services that are not homogeneous could conceal important differences in the effects of geographical distance and other variables on the pattern of service trade. Copyright (c) 2010 The Authors. Journal compilation (c) 2010 The European Bank for Reconstruction and Development.

Suggested Citation

  • Ivan T. Kandilov & Thomas Grennes, 2010. "The determinants of service exports from Central and Eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(4), pages 763-794, October.
  • Handle: RePEc:bla:etrans:v:18:y:2010:i:4:p:763-794
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    Cited by:

    1. Schäffler, Johannes & Hecht, Veronika & Moritz, Michael, 2014. "Regional determinants of German FDI in the Czech Republic : evidence from a gravity model approach," IAB Discussion Paper 201403, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. López, Andrés & Niembro, Andrés & Ramos, Daniela, 2014. "Latin America’s competitive position in knowledge-intensive services trade," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    3. Petrit Gashi & Iraj Hashi & Geoff Pugh, 2014. "Export behaviour of SMEs in transition countries," Small Business Economics, Springer, vol. 42(2), pages 407-435, February.
    4. Gable, Susanna Lundstrom & Mishra, Saurabh, 2011. "Service Export sophistication and Europe's new growth model," Policy Research Working Paper Series 5793, The World Bank.

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