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Modelling Long-Term Competitiveness of Latvia

Author

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  • Gundars Davidsons

    (Bank of Latvia)

Abstract

The paper aims to measure competitiveness of exports and, hence, also competitiveness of Latvia as a state using foreign trade data. To find out whether Latvia's export capacity and the potential of competitiveness have improved after the country regained independence, a particular focus is on the respective recent dynamics. The theoretical model presented in the paper is a version of the assessment of current export dynamics. The model treats processes of the last decade as a more profound specialisation. Latvia is producing almost the same output as in the early-1990s, without much extra value added embedded in it. The EU accession undeniably boosts the export market share providing competitive advantages vis-a-vis other low-cost economies. Nonetheless, even in the presence of a positive short-term effect, it may adversely affect human capital over longer horizons. This implies that on behalf of the state a more active involvement in the build-up of industrial basis is desirable.

Suggested Citation

  • Gundars Davidsons, 2005. "Modelling Long-Term Competitiveness of Latvia," Working Papers 2005/02, Latvijas Banka.
    • Handle: RePEc:ltv:wpaper:200502
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    References listed on IDEAS

    as
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    5. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
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    Cited by:

    1. Falkowski Krzysztof, 2018. "Competitiveness of the Baltic States in International High-Technology Goods Trade," Comparative Economic Research, Sciendo, vol. 21(1), pages 25-43, March.

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    More about this item

    Keywords

    competitiveness; comparative advantage; real convergence;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F19 - International Economics - - Trade - - - Other
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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