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Trade Possibilities and Structure of Foreign Trade: The Case of Hungary and Poland

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  • Cees van Beers
  • Guido Biessen

Abstract

Reintegration of the Central and East European countries into the world economy factors prominently in the transition process. The success of such a challenge depends on domestic factors as well as the trade policy of the European Community toward the economies in transition. Some criticize the Europe Agreements for not being generous enough in the sensitive sectors. We analyze the export possibilities of Hungary and Poland in 1991 and 1992, taking into account their commodity composition of trade. Using a gravity model extended with a variable for the commodity composition of trade, it is shown that Poland and Hungary have not been able to convert their export possibilities into actual exports to the extent long-standing market economies could. However, we show that Hungary and Poland have better export possibilities that a number of West European countries and that Hungary has more export possibilities in the non-sensitive sector than Poland. Our results demonstrate that Europe Agreements appear to be less beneficial for Poland than for Hungary.

Suggested Citation

  • Cees van Beers & Guido Biessen, 1996. "Trade Possibilities and Structure of Foreign Trade: The Case of Hungary and Poland," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 38(2-3), pages 1-19, September.
    • Handle: RePEc:pal:compes:v:38:y:1996:i:2:p:1-19
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    Cited by:

    1. Paas, Tiiu, 2002. "Gravity approach for exploring Baltic Sea regional integration in the field of international trade," HWWA Discussion Papers 180, Hamburg Institute of International Economics (HWWA).
    2. Jean-Raphael Chaponniere & Jean-Pierre Cling, 2009. "Vietnam's Export-Led Growth Model and Competition with China," Economie Internationale, CEPII research center, issue 118, pages 101-130.
    3. Tiiu Paas, 2000. "The gravity approach for modeling international trade patterns for economies in transition," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(4), pages 633-648, November.
    4. Isabel Proença & Maria Fontoura & Enrique Martínez-Galán, 2008. "Trade in the enlarged European Union: a new approach on trade potential," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 7(3), pages 205-224, December.
    5. Enrique Martínez-Galán & Maria-Paula Fontoura & Isabel Proença, 2005. "Trade Potential In An Enlarged European Union: A Recent Approach," International Trade 0508011, University Library of Munich, Germany.
    6. Paas, Tiiu, 2002. "Gravity Approach for Exploring Baltic Sea Regional Integration in the Field of International Trade," Discussion Paper Series 26379, Hamburg Institute of International Economics.
    7. Jean-Raphael Chaponnière & Jean-Pierre Cling & Bin Zhou, 2008. "Vietnam Following in China's Footsteps: The Third Wave of Emerging Asian Economies," WIDER Working Paper Series RP2008-84, World Institute for Development Economic Research (UNU-WIDER).

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