INTERNATIONAL SPECIALZAITION OF BULGARIA AS PER LAFAY INDEX: CHALLENGES TO NATIONAL COMPARATIVE ADVANTAGES IN THE NEW COVID - 19 GLOBAL REALITIES

Julia Stefanova

Journal of Financial and Monetary Economics, 2020, vol. 8, issue 1, 137-147

Abstract: The present paper aims to measure and analyze the changes in the trade specialization pattern of Bulgaria for the period 2001-2018. In theoretical aspect a juxtaposition has been made highlighting the differences and the links between classical (static) models of comparative advantages and contemporary (dynamic) models of competitive advantages of nations to reach complete and comprehensive evaluation of international economic specialization in international trade of small countries with open resource-intensive economy as that of Bulgaria. In methodological aspect the research paper analyzed Lafay index for measuring trade specialization of nations under conditions of rising share of intra-industry trade in added value chains of production. In practical aspects the research piece presents results from statistical analysis of international specialization of Bulgaria as per Lafay index for the period 2001-2018. The results of the empirical model point that for the analyzed period Bulgaria preserves comparative advantages in low-tech and resource intensive economic sectors, which cannot be a stable source of long-term and sustainable economic growth. Bulgaria remains in the group of technologically lagging countries. The paper evaluated potential consequences of pandemic Covid 19 crisis on trade specialization of Bulgaria and advanced some recommendations for overcoming negative impacts and boosting the effect from positive opportunities that Bulgaria faces.

Keywords: trade specialization; Lafay index; comparative and competitive advantages; international trade; Covid-19 (search for similar items in EconPapers)
JEL-codes: F10 F20 F49 (search for similar items in EconPapers)
Date: 2020
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