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How Much Restructuring did the Transition Countries Experience? Evidence from Quality of their Exports

  • Yener Kandogan

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    The increase in exports to market economies is a good sign, but it is not conclusive about the extent of restructuring of production technologies experienced in transition countries. This paper explores the source of the increase with an analysis of their exports’ quality, interprets the results for the extent of restructuring, and discusses the potential factors behind them. Changes in factor intensity and unit values of both CEEC and CIS exports in different manufacturing sectors during 1992-1999 are analyzed. Although CEEC are in a significantly better position than CIS due to Europe Agreements, there is still large number of products with structural problems in CEEC. Insufficient FDI, the OPT in the Europe Agreements, and not fully exploited human capital are suggested as possible factors.

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    File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp637.pdf
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    Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 2004-637.

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    Length: 32 pages
    Date of creation: 01 Jan 2004
    Date of revision:
    Handle: RePEc:wdi:papers:2004-637
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    1. Damien NEVEN, 1994. "Trade Liberalisation with Eastern Nations. How Sensitive ?," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9407, Université de Lausanne, Faculté des HEC, DEEP.
    2. Johannes Stephan, 2002. "Industrial Specialisation and Productivity Catch-Up in CEECs - Patterns and Prospects -," IWH Discussion Papers 166, Halle Institute for Economic Research.
    3. Grossman, G.M. & Helpman, E., 1989. "Quality Ladders And Product Cycles," Papers 39-89, Tel Aviv.
    4. Robert E. Lipsey, 1963. "Price and Quantity Trends in the Foreign Trade of the United States," NBER Books, National Bureau of Economic Research, Inc, number lips63-1, August.
    5. Drábek, Zdenek & Smith, Alasdair, 1995. "Trade Performance and Trade Policy in Central and Eastern Europe," CEPR Discussion Papers 1182, C.E.P.R. Discussion Papers.
    6. King, Alan, 1993. "A Note on Export Unit Value Indices in Competitiveness Variables," Bulletin of Economic Research, Wiley Blackwell, vol. 45(1), pages 69-77, January.
    7. Nathan Sheets & Simona Boata, 1998. "Eastern European Export Performance During The Transition," Contemporary Economic Policy, Western Economic Association International, vol. 16(2), pages 211-226, 04.
    8. Aiginger, Karl, 1997. "The Use of Unit Values to Discriminate between Price and Quality Competition," Cambridge Journal of Economics, Oxford University Press, vol. 21(5), pages 571-92, September.
    9. Treml, Vladimir G., 1981. "The inferior quality of Soviet machinery as reflected in export prices," Journal of Comparative Economics, Elsevier, vol. 5(2), pages 200-221, June.
    10. Brenton, Paul & Gros, Daniel, 1997. "Trade Reorientation and Recovery in Transition Economies," Oxford Review of Economic Policy, Oxford University Press, vol. 13(2), pages 65-76, Summer.
    11. Oleg Bogomolov, 1987. "The Socialist Countries at a Critical Stage in World Economic Development," Problems of Economic Transition, M.E. Sharpe, Inc., vol. 30(8), pages 38-54, December.
    12. Michael Funke & Ralf Ruhwedel, 2002. "Export variety and export performance: Empirical evidence for the OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(1), pages 97-114, March.
    13. David Hummels & Peter J. Klenow, 2002. "The Variety and Quality of a Nation's Trade," NBER Working Papers 8712, National Bureau of Economic Research, Inc.
    14. Djankov, Simeon & Hoekman, Bernard, 1996. "Intra-Industry Trade, Foreign Direct Investment and the Reorientation of East European Exports," CEPR Discussion Papers 1377, C.E.P.R. Discussion Papers.
    15. Gerhard Prosi, 1998. "Economic cooperation between members of the European union and the new democratic countries in Europe," Post-Communist Economies, Taylor & Francis Journals, vol. 10(1), pages 111-118.
    16. Hoekman, Bernard & Djankov, Simeon, 1996. "Intra-industry trade, foreign direct investment, and the reorientation of Eastern European exports," Policy Research Working Paper Series 1652, The World Bank.
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