Sectorial Competitiveness in the Baltic Countries A Revealed Productivity Approach

Milda Valentinaitė, Ben Shepherd and Mantas Valužis

No 252, European Economy - Discussion Papers from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper uses observed patterns of trade and production to infer levels and growth paths (2010-2022) of productivity (“revealed competitiveness”) in the Baltic countries and comparators. In doing so, it makes use of recent advances in the international trade literature, specifically a micro-founded Ricardian model of sectoral bilateral trade that yields the familiar structural gravity form. The analysis covers 18 sectors in all three Baltic countries, as well as three comparator Nordic EU states. There is evidence of mixed performance, from some sectors in which one or more of the Baltics, most often Lithuania, exceeds the average productivity level of the comparator group. But the most common narrative, especially in manufacturing sectors, is incomplete catchup growth: productivity growth in the Baltics has been rapid and consistent but levels are still below what is seen in the Nordic EU member states. Results are less reliable for services, due to data quality issues. Lithuania shows the broadest and most persistent convergence, with strong gains across agriculture, food processing, electronics, machinery, metal products and selected services. Estonia’s catchup is strong but more concentrated, especially in tradable manufacturing, mining and energy. Latvia’s performance is the most uneven, combining advances in electronics, wood and paper, and selected machinery activities with weaker outcomes in textiles, transport equipment and services.

JEL-codes: F14 O47 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2026-07
References: Add references at CitEc
Citations:

Downloads: (external link)
https://economy-finance.ec.europa.eu/publications/ ... uctivity-approach_en (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:euf:dispap:252

Access Statistics for this paper

More papers in European Economy - Discussion Papers from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission Contact information at EDIRC.
Bibliographic data for series maintained by ECFIN INFO ().