Structural Change, Growth and Bazaar Effects in the Single EU Market

Paul Welfens and Dora Borbély
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Dora Borbély: University of Wuppertal and European Institute for International Economic Relations (EIIW)

Chapter 1 in EU - Asean, 2009, pp 7-43 from Springer

Abstract: Economic globalization is a major challenge for the EU15 group which is facing both the challenges of EU eastern enlargement and of economic globalization -in particular this means the rise of ASEAN and China (plus India) in the world economy. In a world economy with overall growth, regional economic catching up and continued technological progress, Europe will have to develop a new pattern of economic specialization; this will include digital modernization and the growth of the information and communication technology sector. As regards the expansion of ASEAN countries and China it is crucial to analyse in which fields they have achieved a comparative advantage in trade with EU15 and to sketch the pattern of export unit value (EVU) dynamics. We expect from a theoretical perspective that both east European accession countries and Asian countries should achieve an absolute rise of export unit values in key sectors over time; the notion of key sectors is, however, ambiguous because the most important sectors in terms of export revenues (or patenting or employment) are changing over time. Economictechnological catching up should go along with a growing emphasis on an improvement of the revealed comparative advantage (RCA) in skill and knowledge intensive sectors. One also may anticipate that export unit values in key sectors rise relative to a benchmark country which often is the US.

Keywords: Foreign Direct Investment; Euro Area; Unskilled Labour; Foreign Direct Investment Inflow; Accession Country (search for similar items in EconPapers)
Date: 2009
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DOI: 10.1007/978-3-540-87389-1_2

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