Bright past, shady future? Past and potential future export performance of CEE countries in a comparative perspective

Joze Damijan, Crt Kostevc and Matija Rojec

LICOS Discussion Papers from LICOS - Centre for Institutions and Economic Performance, KU Leuven

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 (search for similar items in EconPapers)
JEL-codes: F12 F15 F21 O10 P30 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Bright past, shady future? Past and potential future export performance of CEE countries in a comparative perspective (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:lic:licosd:33413

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