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Accession Countries’ Comparative Advantage in the Internal

Author

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  • Ville Kaitila

    (The Research Institute of the Finnish Economy)

Abstract

We analyse trade between Central and Eastern European (CEE) countries and the European Union during 1993-1998 using three methods. First, we calculate the share of intra-industry trade to determine the ex-tent to which two countries trade in similar products. Second, we calculate similarity indices to determine the extent to which the structure of the exports of two countries is similar to a third country. Third, we calculate the revealed comparative advantage of CEE countries in the EU internal market and analyse the results in a two-dimensional space showing relative labour-skills and capital-intensity. We also depict how the factor intensity of comparative advantage has changed since 1993. With this last approach, we find that the comparative advantage of various CEE countries have developed in quite different direc-tions. Some countries have evolved comparative advantage in industries requiring much skilled labour, while others have moved in the opposite direction. This differentiation is also reflected in degrees of capital intensity. A few CEE countries have not shifted in this two-dimensional space.

Suggested Citation

  • Ville Kaitila, 2002. "Accession Countries’ Comparative Advantage in the Internal," International Trade 0209001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpit:0209001
    Note: Type of Document - pdf; prepared on PC; pages: 45
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    References listed on IDEAS

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    1. repec:zbw:bofitp:1999_008 is not listed on IDEAS
    2. Aturupane, Chonira & Djankov, Simeon & Hoekman, Bernard, 1997. "Determinants of intra-industry trade between East and West Europe," Policy Research Working Paper Series 1850, The World Bank.
    3. H. G. Grubel & P. J. Lloyd, 1971. "The Empirical Measurement of Intra‐Industry Trade," The Economic Record, The Economic Society of Australia, vol. 47(4), pages 494-517, December.
    4. Jarko Fidrmuc & Daniela Grozea-Helmenstein & Andreas Wörgötter, 1999. "East-west intra-industry trade dynamics," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(2), pages 332-346, June.
    5. Paul Brenton & Francesca Di Mauro & Matthias Lücke, 2014. "Economic Integration and FDI: An Empirical Analysis off Foreign Investment in the EU and in Central and Eastern Europe," World Scientific Book Chapters, in: INTERNATIONAL TRADE, DISTRIBUTION AND DEVELOPMENT Empirical Studies of Trade Policies, chapter 7, pages 125-151, World Scientific Publishing Co. Pte. Ltd..
    6. repec:bla:ecorec:v:47:y:1971:i:120:p:494-517 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.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Andrea Zaghini, 2006. "Commercial Specialisation in the Countries of Central-Eastern Europe," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, July.
    2. 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).
    3. 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.
    4. Kaitila, Ville, 2003. "Convergence of Real GDP per Capita in the EU15 area: How do the Accession Countries Fit in ?," Discussion Papers 865, The Research Institute of the Finnish Economy.
    5. 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.
    6. 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.
    7. Widgrén, Mika, 2005. "Revealed Comparative Advantage in the Internal Market," Discussion Papers 989, The Research Institute of the Finnish Economy.
    8. 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.
    9. Fidrmuc, Jarko & Korhonen, Iikka, 2003. "Similarity of supply and demand shocks between the euro area and the CEECs," Economic Systems, Elsevier, vol. 27(3), pages 313-334, September.
    10. Jarko Fidrmuc, 2005. "Trade Structure during Accession to the EU," Post-Communist Economies, Taylor & Francis Journals, vol. 17(2), pages 225-234.

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    More about this item

    Keywords

    EU; eastern enlargement; comparative advantage; factor intensity;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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