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

Jože Damijan, Crt Kostevc and Matija Rojec
Authors registered in the RePEc Author Service: Joze P. Damijan

Post-Communist Economies, 2015, vol. 27, issue 3, 306-335

Abstract: This article examines the reasons behind the remarkable export performance of transition economies in the last two decades. Following Redding and Venables and Fugazza, we decompose export performance into the gains due to the advantageous access to foreign markets and export gains on the basis of 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 a significant positive impact on exporting countries' supply capacity, while productivity had a negative impact. The latter is mostly due to unfavourable trends in ULC since EU accession. Unlike in EU-15 and BRIC countries, internal supply capacity is becoming decreasingly important as a basis 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.

Date: 2015
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Citations: View citations in EconPapers (3)

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DOI: 10.1080/14631377.2015.1055965

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