Article

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

BOFIT
SSRN Electronic Journal 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.

  • Source
    • "Normantiene, 2009). The attention was given especially to the so-called accession countries, i.e. transition countries currently seeking EU accession (Aturupane et al., 1997; Kaitila, 1999). It is possible to state that the entry of the extra small economy to the economically integrated area of EU can lead by market structure transitions to consolidation of economic prosperity of such small country (Kraft, 2008). "
    [Show abstract] [Hide abstract]
    ABSTRACT: This paper investigates the patterns of export productivity and specialization in Lithuania. The paper analyses the basic methods of export productivity and specialization measurement; the pattern of Lithuanian; export composition; the importance of export productivity and specialization on Lithuanian economy. For measurement the patterns of export productivity and specialization of Lithuania in the paper two approaches are adopted. First export specialization index and trade dissimilarity index are used to predict structural changes in Lithuanian exports. Secondly, export productivity is used to determine the patterns of Lithuanian export productivity. Using standard international trade classification (SITC) trade dissimilarity index was determined the nature and patterns of export specialization of Lithuania. 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. Using the export specialization index and export productivity index was determined the patterns of export specialization and productivity in trade between Lithuania and the EU. Research indicates that the highest comparative advantage Lithuania has in trade with the EU in mineral products. Such situation shows that Lithuania has comparative advantages in the trade with low-added value commodities.
    Preview · Article · Jan 2011
  • Source
    • "Several studies have assessed the evolution of the trade patterns in the transition economies. The attention was given especially to the so-called accession countries, i.e. transition countries currently seeking EU accession (Aturupane et al., 1997; Fidrmuc et al., 1999; Kaitila, 1999). It is possible to state that the enter of the extra small economy to the economically integrated area of EU can lead by market structure transitions to the consolidation of economic prosperity of such small country (Kraft, 2008). "
    [Show abstract] [Hide abstract]
    ABSTRACT: Bernatonyte@ktu.lt 2 South Baltic Cross-border Cooperation Programme Rzeznicka str. 58, 80-822 Gdansk, akvile.normantiene@southbaltic.eu Global trade environment has changed in three major ways in recent decades. International trade has grown rapidly in value and volume, the composition of trade has altered significantly, and trade flows have been extensively liberalised. Increasing international trade is crucial to the continuance of globalization. Globalization and integration processes are having a major impact on the international trade system. Current economic integration processes (accession of Lithuania, Latvia, Estonia and other States into the EU) expanded the boundaries of the European Union thus influencing tendencies of changes of nature and pattern of trade specialization. Trade among nations is traditionally explained as arising from the specialization of nations in particular industries as conditioned by the nation's relative factor endowments. Traditional theories such as comparative advantages or factor endowments state that countries with different resources or factor endowments will trade with each other. But empirical evidences show that countries with similar endowments do more trade these days. Based on new theories, monopolistic competition and increasing returns lead to intra-industry trade among countries, whereas the old comparative advantage is still applied for the countries separated by high economic distance. Trade specialization theories distinguish between inter-industry and intra-industry specialization. Inter-industry specialization refers to the simultaneous exchange of different goods. Countries specialize by exploiting their comparative advantages arising from differences in technology, innovativeness and differences in factor endowments. Many studies suggest that more developed countries and more specialized trade structure lead to higher intra-industry trade. To understand why economists have to turn their attention to these aspects, differences between inter-industry trade and intra-industry trade specialization are analysed in this article. Seeking to define the nature and pattern of trade specialization in the Baltic States, the basic theories of trade specialization and methods of measurement of inter-industry and intra-industry trade specialization are analyzed in this article. For analyzing the structure and determinants of country's foreign trade and identification the basis on which competitive advantages are built various measures of trade specialization are determined. Using relative trade advantage index and standard international trade classification, the nature and pattern of inter-industry trade specialization was established in the Baltic States. Using Grubel-Lloyd index and standard international trade classification the nature of intra-industry specialization in trade between the Baltic States and the EU was estimated. On the basis of researches it was determined that intra-industry trade share between the Baltic States and the EU over examined period has been growing rapidly. Keywords: trade specialization, inter-industry trade specialization, intra-industry trade specialization, relative trade advantage index, Grubel-Lloyd index, export, import.
    Preview · Article · Jan 2009 · Engineering Economics
  • Source
    • "Normantiene, 2009). The attention was given especially to the so-called accession countries, i.e. transition countries currently seeking EU accession (Aturupane et al., 1997; Kaitila, 1999). It is possible to state that the entry of the extra small economy to the economically integrated area of EU can lead by market structure transitions to consolidation of economic prosperity of such small country (Kraft, 2008). "
    [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.
    Preview · Article ·
Show more