Trade in Central and Eastern European Countries Ten Years after Their EU Accession – Is There Convergence?

Martin Grancay, Ērika Šumilo and Jolita Vveinhardt
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Ērika Šumilo: University of Latvia, Faculty of Economics and Management
Jolita Vveinhardt: Lithuanian Sports University

Society and Economy, 2015, vol. 37, issue 4, 443-460

Abstract: The paper focuses on the effects of EU’s Eastern Enlargement of 2004 on trade convergence within the EU and among the new member states from Central and Eastern Europe (CEE-8). Using sigma-convergence approach, it finds evidence of convergence of exports and imports per capita as well as of productivity levels associated with the member states’ export baskets. Convergence of territorial and commodity structures of trade has not occurred; conversely, divergence has been observed, leading to the possible conclusion that multinational companies have adjusted their production structure in facilities across the EU to achieve higher economies of scale. Correlation analysis shows that revealed comparative advantages of the old and new member states have come closer to each other. As an example, the paper also offers a brief comparison of trade development in two CEE-8 countries, Latvia and Slovakia, after their entry into the EU.

Keywords: foreign trade; European integration; convergence; Eastern enlargement; EXPY (search for similar items in EconPapers)
JEL-codes: F15 (search for similar items in EconPapers)
Date: 2015
Note: The majority of the research included in this paper was conducted during Martin Grančay’s research stay at the University of Latvia as a part of the Latvian Fellowship. The work was also supported by the Cultural and Educational Grant Agency of the Ministry of Education, Science, Research and Sport of the Slovak Republic, KEGA grant no. 017EU-4/2015.
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