Trade and Revealed Comparative Advantage: Hungary, the Czech Republic, and the European Union

10/1999; DOI: 10.2139/ssrn.1016686
Source: RePEc

ABSTRACT This study analyses the trade of Hungary and the Czech Republic with the European Union in 1997. After a general introduction, the focus turns to the extent of intra-industry trade (IIT) and its horizontal and vertical components. The extent of IIT is also analysed in light of the flows of foreign direct investment (FDI) from the European Union to Hungary and the Czech Republic. This is followed by an analysis of revealed comparative advantage (RCA) in trade between the EU and the two Central European countries. The CN4-digit trade data is divided into two groups according to whether a country enjoys a revealed comparative advantage in a given market area or not. Statistical tests are performed to determine the extent to which the RCA structures of each pair of countries are dependent. The analysis also takes into account the volumes of trade flows.

1 Bookmark
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: This paper investigates the nature and patterns of export specialization in the Baltic States. The paper analyses the basic methods of export specialization measurement; the pattern of Lithuanian, Latvian and Estonian export composition; the nature and patterns of export specialization in trade between the Baltic States and the EU. For measurement the patterns of export specialization in the paper two approaches are adopted. The index of revealed comparative advantage (RCA) is used to determine the patterns of comparative advantage. Secondly, trade dissimilarity index is used to predict structural changes in the Baltic States exports. Using these methods of measurement and standard international trade classification (SITC) was established the nature and patterns of export specialization in the Baltic States. It was found that the biggest flows from Lithuania to the EU are in such groups: food, drink and tobacco; raw materials; mineral fuels, lubricants and related materials. It was determined that there were few branches where Latvia had a positive comparative advantage: raw materials and other manufactured goods. The researches show that Estonia has achieved RCA in trade with the EU in: raw materials and mineral fuels, lubricants and related materials.
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: This paper considers trade specialisation in Russia, examining changes in trade patterns at the sectoral level over the transition period. Trade based on inter-industry specialisation and intra-industry trade (IIT) are empirically distinguished using the Aquino and Grubel-Lloyd indices. The Aquino index is applied to measure the degree of inter-industry specialisation by sector, while the Grubel-Lloyd index is used to establish the level of IIT between industries. The empirical results support recent trade theory, which predicts an increasing level of intra-industry trade with liberalisation processes. They also suggest how inter- and intra-industry trade coexist. The final econometric estimation of the factor content of Russia’s exports (specialisation in resource-intensive products) supports the index analysis.
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: After the last enlargement towards East, the European Union (EU) established a new peripheral area. In these conditions we propose to identify the degree of divergence of industrial structure between the new peripheral area and the core of the EU (EU�15), by characterizing their trade relations. The question that arises is to find the most appropriate methods to explain much more the trade between the two areas. The aim of this paper is to analyze the trade flows between this two area's countries using some different panel data estimation methods like as Fixed Effect Model (FEM), Random Effect Model (REM), HausmanTaylor (HT) and Feasible Generalized Least Squares (FGLS). Using HT method to estimate our gravity model, we get unbiased and efficient parameters estimation, even when a correlation exists between the explanatory variables and the specific unobservable characteristics of each individual . Our findings generally support the literature which suggests that country size, difference between Gross Domestic Product per capita, association agreement, political stability, reform progress, landlocked, geographical distance, and real exchange rate may be important drivers that can affect the international trade flows patterns between those two zones. Key-Words: Gravity models, Panel Data Models, International trade, Comparative advantage .


1 Download
Available from