CENTRAL AND EASTERN EUROPEAN COUNTRIES IN THE INTERNATIONAL DIVISION OF LABOUR IN EUROPE

Michael Freudenberg () and Francoise Lemoine ()

Working Papers from CEPII research center

Abstract: Ten countries in Central and Eastern Europe have applied for EU membership and five of them (Estonia, Hungary, Czech Republic, Poland, Slovenia) have already begun negotiation for accession . All ten countries have Association agreements with the EU, which have liberalised most trade in industrial products. In the perspective of their future integration in an enlarged EU, the present paper analyses the position of the ten candidates in the international division of labour in Europe, for the recent period (1993-1996). The paper points out that beyond the relative stability in the pattern of comparative advantage observed at the industry level, changes are underway. The present pattern of comparative advantage may reflect more the past strengths of these countries than their future specialisation. First, there has been a trend towards de-specialisation: trade of Central European countries has been characterised by a decrease of their revealed comparative advantages in the very sectors in which they were the strongest(mainly in clothing and footwear industries), as well as by a decrease of some of their largest comparative disadvantages. Second, in this short period of time, some countries succeeded in building new comparative advantages. Most remarkable changes took place in engineering industries in which Central European countries have achieved high export growth. Third, the involvement of foreign capital in manufacturing industry has reached high levels and has been an important element underlying export performance.

Keywords: comparative advantage; foreign capital; intra-industry; international division of the production process; Balkan and Baltic countries; Central European countries; quality segments (search for similar items in EconPapers)
JEL-codes: F14 F15 F21 (search for similar items in EconPapers)
Date: 1999-04
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Persistent link: http://EconPapers.repec.org/RePEc:cii:cepidt:1999-05

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