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External competitiveness of EU candidate countries

Author

Listed:
  • Orszaghova, Lucia
  • Savelin, Li
  • Schudel, Willem

Abstract

As the current financial crisis has shown, macroeconomic imbalances such as persistent current account and trade deficits, can seriously undermine a country's resilience to economic shocks. Maintaining and enhancing external competitiveness has thus become of increasing concern, particularly to European Union (EU) candidate countries whose economic growth models have been challenged in recent years. Drawing on previous studies, this paper assesses developments in the external competitiveness of EU candidate countries between 1999 and 2011. Taking a broad approach to the issue of competitiveness, the paper considers various indicators of both short and long-term competitiveness, including those related to domestic prices and costs, export performance, and institutional and structural issues. In the context of EU integration, comparisons are drawn with developments in the EU12. We find that, during the pre-crisis period, all candidate countries experienced robust export market growth, but also suffered losses in price and cost competitiveness. In terms of export characteristics, progress has been heterogeneous and also fairly slow when compared with the EU12. All candidate countries have increased their number of export products and trading partners, but only a few have been able to export more complex products. As regards structural issues such as corruption and bureaucratic efficiency, all countries have performed quite poorly with the exception of Iceland. JEL Classification: F1, F43, O52, P22

Suggested Citation

  • Orszaghova, Lucia & Savelin, Li & Schudel, Willem, 2013. "External competitiveness of EU candidate countries," Occasional Paper Series 141, European Central Bank.
    • Handle: RePEc:ecb:ecbops:2013141
    Note: 1998793
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    File URL: https://www.ecb.europa.eu//pub/pdf/scpops/ecbocp141.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Vesna Bucevska, 2015. "Currency Crises in EU Candidate Countries: An Early Warning System Approach," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(4), pages 493-510, September.
    3. Madalina Ecaterina Popescu & Maria-Isadora Lazar, 2015. "Analysis of the Post-Crisis Economic Performances in the European Union," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(3), pages 5-14, June.
    4. Akmal, Nadeem & Akhtar, Waqar & Shah, Hassnain & Niazi, Muhammad Azam & Saleem, Tariq, 2014. "The Structure and Competitiveness of Pakistan’s Basmati Rice Exports," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 4(04), pages 1-9, April.
    5. Olivera Kostoska & Ilija Hristoski, 2018. "Trade Dynamics, Revealed Comparative Advantage, And International Competitiveness: Evidence From Macedonia," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 63(218), pages 23-60, July – Se.
    6. Mladen Vedris, 2013. "The Republic Of Croatia Before Its Entry Into The Eu: Expectations And Limits," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 9, pages 415-434.
    7. Orszaghova, Lucia & Schudel, Willem & Dautović, Ernest, 2014. "Intra-industry trade between CESEE countries and the EU15," Working Paper Series 1719, European Central Bank.
    8. Nagayasu, Jun, 2016. "Commonality and Heterogeneity in Real Effective Exchange Rates: Evidence from Advanced and Developing Countries," MPRA Paper 70078, University Library of Munich, Germany.
    9. Mariarosaria Comunale, 2019. "Long‐run determinants and misalignments of the real effective exchange rate in the EU," Scottish Journal of Political Economy, Scottish Economic Society, vol. 66(5), pages 649-672, November.

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    More about this item

    Keywords

    EU candidate countries; export growth; export product complexity; export specialisation; extensive and intensive margins; external competitiveness; foreign direct investment; intra-industry trade; structural characteristics;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • P22 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Prices

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