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Trade Models in the European Union

Claudius Graebner (), Dennis Tamesberg (), Timo Kapelari (), Philipp Heimberger () and Jakob Kapeller ()
Additional contact information
Claudius Graebner: Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria, https://claudius-graebner.com/
Dennis Tamesberg: Department for Economic, Welfare and Social Policy, Chamber of Labour, Linz, Austria
Timo Kapelari: Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria

Authors registered in the RePEc Author Service: Claudius Gräbner ()

No 95, ICAE Working Papers from Johannes Kepler University, Institute for Comprehensive Analysis of the Economy

Abstract: By studying the factors underlying differences in trade performance across European economies, this paper derives six different "trade models" for 22 EU-countries and explores their developmental and distributional implications. We first introduce a typology of trade models by clustering countries based on four key dimensions of trade performance: endowments, technological specialization, labour market characteristics and regulatory requirements. The resulting clusters comprise countries that base their export success on similar trade models. Our results indicate the existence of six different trade models: the 'primary goods model' (Latvia, Estonia), the 'finance model' (Luxembourg), the 'flexible labour market model' (UK), the 'periphery model' (Greece, Portugal, Spain, Italy, France), the 'industrial workbench model' (Slovenia, Slovakia, Poland, Hungary, Czech Republic), and the 'high-tech model' (Sweden, Denmark, Netherlands, Belgium, Ireland, Finland, Germany and Austria). Subsequently, we comparatively analyse the economic development and trends in inequality across these trade models. We observe a shrinking wage share and increasing personal income inequality in most of the trade models. The 'high-tech model' is an exceptional case, being characterised by a relatively stable economic development and an institutional setting that managed to counteract rising inequality.

Keywords: Trade policy; cluster analysis; European Union; trade models (search for similar items in EconPapers)
Pages: 27 pages
Date: 2019-06
New Economics Papers: this item is included in nep-cis, nep-eec and nep-hme
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Related works:
Working Paper: Trade models in the European Union (2020) Downloads
Working Paper: Trade models in the European Union (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ico:wpaper:95

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