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Advantages and drawbacks of EU membership - the structural dimension

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  • Hubert Gabrisch
  • Klaus Werner

Abstract

Trade liberalization is often considered a sufficient prerequisite for inducing desirable structural adjustment. Entry of transition economies (TEs) into the European Union (EU) should induce structural adjustments at the firm level to move trade and production profiles closer to the EU's patterns. At the macroeconomic level this should manifest itself in a rise in intra-industry trade based on horizontal product differentiation. Trade liberalization in TEs to date provides little empirical support for such a process as there are strong signs of persistent interindustry trade and vertical product differentiation. This may have come about because of the minimalist role of government in TEs. But also restricted access to foreign capital, information asymmetries, and the persistent lack of well-functioning markets provide strong arguments in favor offormulating industrial policies to strengthen the competitiveness of manufacturing firms rather than the regional approach that is more typical of the EU. The EU's legal framework leaves room for designing such a policy with subsidies, provided it is adjudicated as compatible with the EU's competition policy.

Suggested Citation

  • Hubert Gabrisch & Klaus Werner, 1998. "Advantages and drawbacks of EU membership - the structural dimension," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 40(3), pages 79-103, September.
    • Handle: RePEc:pal:compes:v:40:y:1998:i:3:p:79-103
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    Cited by:

    1. Ismatilla Mardanov, 2023. "Issues of EU Member Nations’ Shared Sovereignty, Institutions, and Economic Development," Economies, MDPI, vol. 11(4), pages 1-16, April.
    2. Károly Attila SOÓS, 2013. "The Role of Intra-Industry Trade in the Industrial Upgrading of the 10 CEECs New Members of the European Union," KIER Working Papers 868, Kyoto University, Institute of Economic Research.
    3. Stephan, J., 2000. "EU-Integration and Development Prospects of CEECs. The Productivity-Gap and Technological Structural Change," Papers 112, American Cairo - Economics and Political Sciences.
    4. Ansgar Belke & Martin Hebler, 2000. "EU enlargement and labour markets in the CEECs," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 35(5), pages 219-230, September.
    5. Ansgar Belke & Martin Hebler, 2002. "Towards a European Social Union: Impacts on Labor Markets in the Acceding Countries," Constitutional Political Economy, Springer, vol. 13(4), pages 313-335, December.
    6. Soós, Károly Attila, 2002. "Az átmeneti gazdaságok EU-exportja nemzetközi összehasonlításban, 1993-2000 [International comparison of EU exports by transitional economies, 1993-2000]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1063-1080.

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