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Specialisation and/or Convergence: Structure of European Exports and Production

  • Kaitila, Ville

We analyse the degree of EU countries’ specialisation in their exports and manufacturing value added using the Herfindahl-Hirschmann index and the degree of structural similarity using the similarity index developed by Finger and Kreinin (1979). We also analyse the convergence of GDP growth rates over time and compare it with export similarity. At the industry level (HS2), EU15 countries’ exports became more specialised before the introduction of the euro and less specialised thereafter. However, exports have become more specialised at the product level (HS6) during the euro years. Manufacturing value added (21 sectors) has become more specialised both before and after 1999. The results for the ten ex-transition countries’ exports are different reflecting their economic transformation. Also the post-2008 period with economic distress creates special cases. Export structures became more similar before 2008. However, manufacturing value added similarity decreased. GDP growth rates have been more uniform after the introduction of the euro than in 1992–1999. We find that similarity in export structures is positively associated with the degree of GDP growth rate correlation vis-à-vis the Euro Area average. There are a half a dozen outliers that differ in their GDP growth developments, among them the Euro Area members Greece, Malta and Slovakia

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Paper provided by The Research Institute of the Finnish Economy in its series ETLA Working Papers with number 12.

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Length: 29 pages
Date of creation: 13 Jun 2013
Date of revision:
Handle: RePEc:rif:wpaper:12
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  1. Kaitila, Ville, 2010. "Quality-adjusted similarity of EU-countriesŽ export structure," Discussion Papers 1227, The Research Institute of the Finnish Economy.
  2. Ekholm, Karolina & Forslid, Rikard, 1998. "Trade and Location with Horizontal and Vertical Multi-Region Firms," Working Paper Series 504, Research Institute of Industrial Economics.
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  13. Helena Marques, 2008. "Trade And Factor Flows In A Diverse Eu: What Lessons For The Eastern Enlargement(S)?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(2), pages 364-408, 04.
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