Economic integration and export complexity: the case of Slovakia

Piotr Gabrielczak and Tomasz Serwach
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Piotr Gabrielczak: Department of Macroeconomics, Institute of Economics, University of Lodz
Tomasz Serwach: Department of International Trade, Institute of Economics, University of Lodz

No 6/2017, Lodz Economics Working Papers from University of Lodz, Faculty of Economics and Sociology

Abstract: The goal of the article is to evaluate the impact of the European Union (EU) accession on the complexity of goods in Slovak exports. The traditional theories or trade (Ricardian and Heckscher-Ohlin models) show that such an engagement in economic integration may lead to specialization in the production of either more or less sophisticated goods, depending on the country’s technological advancement and factor endowment. At the same time, increased FDI flows may stimulate the engagement of a country in international production chains with ambiguous effects on export complexity. Because it is impossible to a priori predict the effect economic integration may have on the complexity, it is reasonable to verify it empirically. The authors used the Synthetic Control Method (SCM) to compare the observed post-accession levels of exports complexity in Slovakia with the counterfactual values of that country remaining outside of the EU. The obtained results show that the accession led to an increase in complexity of exported goods.

Keywords: economic integration; European Union; international trade; complexity; treatment effect; Synthetic Control Method (search for similar items in EconPapers)
JEL-codes: C21 F14 F15 (search for similar items in EconPapers)
Date: 2017-02
New Economics Papers: this item is included in nep-dcm, nep-int and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:ann:wpaper:6/2017

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