Bright Past, Shady Future? Past and Potential Future Export Performance of CEE Countries in a Comparative Perspective

31 Pages Posted: 27 Jun 2013

See all articles by Jože P. Damijan

Jože P. Damijan

University of Ljubljana, Slovenia - Department of International Economics

Črt Kostevc

University of Ljubljana - Faculty of Economics

Matija Rojec

University of Ljubljana - Faculty of Social Sciences

Date Written: April 08, 2013

Abstract

In this paper we examine the reasons behind the remarkable export performance of transition economies in the last two decades. Following Redding and Venables (2004, 2004a) and Fugazza (2004), we decompose export performance into the gains due to the advantageous access to foreign markets and export gains on the side of the internal supply capacity. We find that size of the economy, inward FDI penetration, most notably in the manufacturing sector, export unit values, denoting the structural changes of CEECs’ exports, and the quality of institutions and infrastructure had significant positive impact on exporting country’s supply capacity, while productivity had a negative impact. The latter is mostly due to unfavourable trends in ULC since the accession. Unlike in EU-15 and BRIC countries, the internal supply capacity is becoming decreasingly important as base of CEECs export performance. At the same time, trends in cost competitiveness are worsening relative to competing countries, while benefits of EU accession have been mostly exploited. This may compromise the CEECs’ future export growth.

Keywords: exports performance, supply capacity, foreign market access, Central and Eastern European countries

JEL Classification: F120, F150, F210, O100, P300

Suggested Citation

Damijan, Joze P. and Kostevc, Crt and Rojec, Matija, Bright Past, Shady Future? Past and Potential Future Export Performance of CEE Countries in a Comparative Perspective (April 08, 2013). Available at SSRN: https://ssrn.com/abstract=2285388 or http://dx.doi.org/10.2139/ssrn.2285388

Joze P. Damijan

University of Ljubljana, Slovenia - Department of International Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia
+386 61 189 24 00 (Phone)
+386 61 189 26 98 (Fax)

Crt Kostevc (Contact Author)

University of Ljubljana - Faculty of Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia

Matija Rojec

University of Ljubljana - Faculty of Social Sciences ( email )

Kardeljeva ploscad 5
Ljubljana, 1000
Slovenia

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