IDEAS home Printed from https://ideas.repec.org/p/rif/dpaper/1034.html
   My bibliography  Save this paper

Trade Potential, Intra-industry Trade and Factor Content Revealed Comperative Advantage in the Baltic Sea Region

Author

Listed:
  • Wirgrén, Mika

Abstract

This paper investigates trade potential, intra-industry trade and comparative advantage in the Baltic Sea Region. The evaluation of regions comparative advantage and intra-industry trade are based on the Balassa index of revealed comparative advantage and the Grubel-Lloyd index respectively. The analysis is carried out at HS 4-digit level. Trade potential is assessed using applying earlier versions of the gravity model of international trade. The actual trade flows analysis suggest that the BSR has reached its potential importance in intra-EU25+ (EU25, Norway and Russia) trade. In this respect the countries within BSR differ, however, considerably. BSRs share falls considerably below its potential share in Russias, Latvias and Norways European exports. The overall conclusion in trade potential analysis is that the centre of gravity within BSR is likely to move gradually from Stockholm-Hamburg axis somewhat to the east. The major part of the analysis concentrates on the factor intensities of the Baltic Sea Regions comparative advantage and its overlap with a sample of other countries. The analysis demonstrates surprisingly big changes in some Baltic Sea Regions countries specialisation patterns. The paper shows that in nearly all countries in the Baltic Sea Region the factor contents of revealed comparative advantage has shifted towards less physical capital intensive and more human capital intensive direction. Especially, Finland, Estonia and Poland are best examples in this respect. In 1996, the picture of the factor contents of the regions comparative advantage was clearly polarised but there has been some convergence after that. In terms of intra-industry trace the region can be divided to the northern and southern triangles. The former consists of Finland, Sweden and Estonia and the latter of Germany, Denmark and Poland. These two are linked via Sweden.

Suggested Citation

  • Wirgrén, Mika, 2006. "Trade Potential, Intra-industry Trade and Factor Content Revealed Comperative Advantage in the Baltic Sea Region," Discussion Papers 1034, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:dpaper:1034
    as

    Download full text from publisher

    File URL: http://www.etla.fi/wp-content/uploads/2012/09/dp1034.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kaitila, Ville, 2004. "The Factor Intensity of Accession and EU15 Countries' Comparative Advantage in the Internal Market," Discussion Papers 925, The Research Institute of the Finnish Economy.
    2. Alho, Kari, 2003. "The Impact of Regionalism on Trade in Europe," Discussion Papers 843, The Research Institute of the Finnish Economy.
    3. Neven, Damien J, 1994. "Trade Liberalization with Eastern Nations. How Sensitive?," CEPR Discussion Papers 1000, C.E.P.R. Discussion Papers.
    4. repec:zbw:bofitp:2001_003 is not listed on IDEAS
    5. Ville Kaitila, 2002. "Accession Countries’ Comparative Advantage in the Internal," International Trade 0209001, University Library of Munich, Germany.
    6. repec:zbw:bofitp:2004_019 is not listed on IDEAS
    7. Kaitila, Ville & WidgrÉn, Mika, 1999. "Revealed Comparative Advantage in Trade between the European Union and the Baltic States," Discussion Papers 697, The Research Institute of the Finnish Economy.
    8. Alho, Kari E O, 2003. "The Impact of Regionalism on Trade in Europe," Royal Economic Society Annual Conference 2003 3, Royal Economic Society.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Widgrén, Mika, 2005. "Revealed Comparative Advantage in the Internal Market," Discussion Papers 989, The Research Institute of the Finnish Economy.
    2. Alho, Kari E.O., 2004. "A Gravity Model under Monopolistic Competition," Discussion Papers 962, The Research Institute of the Finnish Economy.
    3. Michael Peneder, 2003. "Industry Classifications: Aim, Scope and Techniques," Journal of Industry, Competition and Trade, Springer, vol. 3(1), pages 109-129, March.
    4. Vlatka Bilas & Mile Bosnjak, 2015. "Revealed Comparative Advantage And Merchandise Exports: The Case Of Merchandise Trade Between Croatia And The Rest Of The European Union Member Countries," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 24(1), pages 29-47, june.
    5. Andrea Zaghini, 2006. "Commercial Specialisation in the Countries of Central-Eastern Europe," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, July.
    6. Ville Kaitila, 2002. "Accession Countries’ Comparative Advantage in the Internal," International Trade 0209001, University Library of Munich, Germany.
    7. Edin, Per-Anders & Fredriksson, Peter & Lundborg, Per, 2000. "Trade, Earnings, and Mobility - Swedish Evidence," Working Paper Series 163, Trade Union Institute for Economic Research.
    8. 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.
    9. J. Caetano & A. Galego & E. Vaz & C. Vieira & I. Vieira, 2002. "The Eastward Enlargement of the Eurozone: Trade and FDI," Eastward Enlargement of the Euro-zone Working Papers wp07, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Aug 2002.
    10. Ehrlich, Laura, 2002. "The EU Single Market and Customs Policy: Impact on Estonian Foreign Trade," Discussion Papers 797, The Research Institute of the Finnish Economy.
    11. Paul G. Hare, 2000. "Trade Policy during the Transition. Lessons from the 1990s," CERT Discussion Papers 0006, Centre for Economic Reform and Transformation, Heriot Watt University.
    12. Chonira Aturupane & Simeon Djankov & Bernard Hoekman, 1999. "Horizontal and vertical intra-industry trade between Eastern Europe and the European union," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(1), pages 62-81, March.
    13. Tito Boeri & Joaquim Oliveira Martins, 2002. "Varieties, Jobs and EU Enlargement," Rivista di Politica Economica, SIPI Spa, vol. 92(1), pages 139-178, January-F.
    14. Jarko Fidrmuc, 2005. "Trade Structure during Accession to the EU," Post-Communist Economies, Taylor & Francis Journals, vol. 17(2), pages 225-234.
    15. Attila Csajbók (ed.) & Ágnes Csermely (ed.), 2002. "Adopting the euro in Hungary: expected costs, benefits and timing," MNB Occasional Papers 2002/24, Magyar Nemzeti Bank (Central Bank of Hungary).
    16. Afontsev Serguey, 2002. "Endogenous Tariff Protection and the Level of Trade Distortions in Russia," EERC Working Paper Series 01-07e, EERC Research Network, Russia and CIS.
    17. Michaël Freudenberg & Françoise Lemoine, 1999. "Central and Eastern European Countries in the International Division of Labour in Europe," Working Papers 1999-05, CEPII research center.
    18. Lindström, Maarit, . "Locational Sources of Competitiveness: Finnish Companies' International Business Operations in the Baltic Sea Region," ETLA A, The Research Institute of the Finnish Economy, number 37, June.
    19. Kaitila, Ville, 1999. "Trade and revealed comparative advantage: Hungary, the Czech Republic, and the European Union," BOFIT Discussion Papers 8/1999, Bank of Finland Institute for Emerging Economies (BOFIT).
    20. Eichengreen, Barry & Kohl, Richard, 1998. "The External Sector, the State and Development in Eastern Europe," CEPR Discussion Papers 1904, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    comparative advantage; factor intensity; Baltic Sea region;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F15 - International Economics - - Trade - - - Economic Integration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rif:dpaper:1034. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kaija Hyvönen-Rajecki (email available below). General contact details of provider: https://edirc.repec.org/data/etlaafi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.