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Competitiveness in Central-Europe; What Has Happened Since EU Accession?

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  • Céline Allard

Abstract

Since EU accession, trade flows have exhibited strong dynamics in Central-Eastern Europe (CEE). During the period leading to the current global turmoil, the region has also experienced continuous exchange rate appreciation and rapid FDI inflows, both likely to have affected these countries' competitiveness. This paper describes how the determinants of exports and imports have evolved in CEE countries over 2002-07 and econometrically derives their contribution to trade, with a view to assessing competitiveness developments. The analysis reveals that the global and domestic upswings, along with rising trade market shares, go a long way toward accounting for trade developments in CEE countries until 2007, pointing to continuous nonprice competitiveness gains. It also finds that exchange rate appreciation did not unduly weigh on export and import growth, suggesting that most of it reflected an upward movement in its equilibrium value. While the region entered the current period of global slowdown from a strong competitiveness position, the crisis also exposed the vulnerability of its heavy reliance on global demand to a trade shock.

Suggested Citation

  • Céline Allard, 2009. "Competitiveness in Central-Europe; What Has Happened Since EU Accession?," IMF Working Papers 09/121, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:09/121
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    Cited by:

    1. Ansgar Belke & Lukas Vogel, 2015. "Monetary commitment and structural reforms: a dynamic panel analysis for transition economies," International Economics and Economic Policy, Springer, vol. 12(3), pages 375-392, September.
    2. Elena Bobeica & Paulo Soares Esteves & António Rua & Karsten Staehr, 2016. "Exports and domestic demand pressure: a dynamic panel data model for the euro area countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(1), pages 107-125, February.
    3. Styliani Christodoulopoulou & Oļegs Tkačevs, 2016. "Measuring the effectiveness of cost and price competitiveness in external rebalancing of euro area countries: What do alternative HCIs tell us?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(3), pages 487-531, August.
    4. Lucian Claudiu ANGHEL & Florina – Magdalena PINZARU & Mihaela DINU, 2014. "Aspects of Price Competitiveness in the Context of Preparing for Accession to the Euro Zone. New Challenges for Entrepreneurs. Romania’s Case," Management Dynamics in the Knowledge Economy Journal, College of Management, National University of Political Studies and Public Administration, vol. 2(3), pages 525-536, December.
    5. repec:nup:jrmdke:v:2:y:2014:i:3:p:525-536 is not listed on IDEAS
    6. Valeria Costantini & Francesco Crespi, 2015. "European enlargement policy, technological capabilities and sectoral export dynamics," The Journal of Technology Transfer, Springer, vol. 40(1), pages 25-69, February.
    7. Lucian Claudiu ANGHEL & Laurentiu-Mihai TREAPAT, 2015. "Main Economic Policies in order to Manage an Optimum Accession of Romania to the Euro Zone," Management Dynamics in the Knowledge Economy Journal, College of Management, National University of Political Studies and Public Administration, vol. 3(1), pages 151-169, March.
    8. repec:wfo:wstudy:44535 is not listed on IDEAS

    More about this item

    Keywords

    Central and Eastern Europe; Cross country analysis; Exports; European Union; Exchange rate appreciation; Economic models; Imports; Global competitiveness; Foreign direct investment; Trade; Transition economies; Competitiveness; exchange rate; EU accession; domestic demand; export prices; trade flows; trade partners; world demand;

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