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Effects of Foreign Trade on the Economic Performance of Industries—Evidence from Wood Processing Industry of Czechia and Slovakia

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  • Andrea Sujová

    (Department of Economics, Management and Business, Technical University in Zvolen, T. G. Masaryka 24, 960 01 Zvolen, Slovakia
    Department of Forest and Wood Products Economics and Policy, Mendel University in Brno, Zemedelská 3, 613 00 Brno, Czech Republic)

  • Ľubica Simanová

    (Department of Economics, Management and Business, Technical University in Zvolen, T. G. Masaryka 24, 960 01 Zvolen, Slovakia)

  • Václav Kupčák

    (Department of Forest and Wood Products Economics and Policy, Mendel University in Brno, Zemedelská 3, 613 00 Brno, Czech Republic)

  • Jarmila Schmidtová

    (Department of Matematics and Descriptive Geometry, Technical University in Zvolen, T. G. Masaryka 24, 960 01 Zvolen, Slovakia)

  • Adriana Lukáčiková

    (Department of Operations Research and Econometrics, University of Economics in Bratislava, Dolnozemská cesta 1, 852 35 Bratislava, Slovakia)

Abstract

As was first stressed by the classical economists Adam Smith and David Ricardo, international trade plays a crucial role in the growth process. The paper aims to analyze the influence of foreign trade on economic performance in the wood processing industry (WPI) of Czechia and Slovakia. The multivariate regression method (MLR), assumption tests for MLR models, and Granger causality test were applied to identify association between foreign trade economic performance, and indicators were formed to measure the effects of foreign trade at the industry level. The Granger test revealed the unidirectional causality in the Slovak WPI and bidirectional causality in the Czech WPI. The results revealed that the net export growth has a positive effect on the economic performance of the industry, but only if the growth in imports is lower than in exports. The balanced trade balance indicated no influence of foreign trade on economic performance. The paper contributes to existing knowledge with indicators for evaluation of foreign trade effects on the performance of the industry. The paper also brings new empirical knowledge in trade balance effects on the economic performance of industries.

Suggested Citation

  • Andrea Sujová & Ľubica Simanová & Václav Kupčák & Jarmila Schmidtová & Adriana Lukáčiková, 2021. "Effects of Foreign Trade on the Economic Performance of Industries—Evidence from Wood Processing Industry of Czechia and Slovakia," Economies, MDPI, vol. 9(4), pages 1-20, November.
    • Handle: RePEc:gam:jecomi:v:9:y:2021:i:4:p:180-:d:680222
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    References listed on IDEAS

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