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

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.

[1]  Daniel E. Geer,et al.  Convergence , 2021, IEEE Secur. Priv..

[2]  R. Capello,et al.  Openness to Globalization and Regional Growth Patterns in CEE Countries: From the EU Accession to the Economic Crisis , 2015 .

[3]  M. Grančay.  Eastern Enlargement’ Of The European Unıon – Changes In Trade Structure And Its Instabılıty , 2013 .

[4]  G. Zarotiadis,et al.  European Union: a diverging Union? , 2013 .

[5]  Krzysztof Bandasz.  Poland and Slovakia during the economic crisis 2008–2010 , 2013 .

[6]  Michael Pfaffermayr,et al.  The Pure Effects of European Integration on Intra‐EU Core and Periphery Trade , 2013 .

[7]  Sandra Jēkabsone,et al.  Structural Changes in the Economy of Latvia After it Joined the European Union , 2013 .

[8]  Adnan Kasman,et al.  Efficiency Convergence in All EU Member and Candidate Countries' Banking Markets , 2013 .

[9]  Louise Curran,et al.  EU Enlargement and the Evolution of European Production Networks , 2012 .

[10]  Laurent Cavenaile,et al.  An empirical analysis of income convergence in the European Union , 2011 .

[11]  É. Polgár,et al.  Trade with Central and Eastern Europe: Is it Really a Threat to Wages in the West? , 2010, SSRN Electronic Journal.

[12]  M. Próchniak,et al.  EU enlargement and real economic convergence , 2010 .

[13]  Asier Minondo.  Exports' quality-adjusted productivity and economic growth , 2010 .

[14]  Jacek Więcławski.  The Eastern Enlargement of the European Union: Fears, Challenges, and Reality , 2010 .

[15]  Z. Pogátsa.  Tatra Tiger growth miracle or belated recovery , 2009 .

[16]  R. Pearce,et al.  MNEs’ strategies in Central and Eastern Europe: key elements of subsidiary behaviour , 2006 .

[17]  Jason Hwang,et al.  What you export matters , 2005 .

[18]  R. Barrell,et al.  Domestic institutions, agglomerations and foreign direct investment in Europe , 1999 .

[19]  A. Alesina,et al.  Openness, Country Size and the Government , 1997 .

[20]  Dan Ben-David,et al.  Trade and Convergence Among Countries , 1996 .

[21]  D. Quah.  Galton's Fallacy and Tests of the Convergence Hypothesis (Now published in Scandinavian Journal of Economics 95 (4), 1993, pp.427-443.) , 1993 .

[22]  B. Balassa.  Trade Liberalisation and “Revealed” Comparative Advantage , 1965 .

[23]  K. Beņkovskis,et al.  Non-Price Competitiveness Gains of Central, Eastern and Southeastern European Countries in the EU Market , 2012 .

[24]  M. Bacchetta,et al.  A Practical Guide to Trade Policy Analysis , 2012 .

[25]  Nora,et al.  Development of the Chinese-Slovak Economic Relations ∗ , 2012 .

[26]  A. Levchenko,et al.  Web Appendix for : Comparative Advantage and the Welfare Impact of European Integration , 2012 .

[27]  H. Uçak.  THE CATCH-UP PROCESS OF RELATIVE WAGES IN EUROPEAN UNION NEW MEMBER STATES , 2012 .

[28]  S. Feuerstein,et al.  Price convergence after the Eastern EU enlargement? Evidence from European Retail Food Prices February 14, 2012 , 2012 .

[29]  M. W. Hansen,et al.  Multinational Corporations and Local Firms in Emerging Economies , 2011 .

[30]  Tomáš Dudáš.  Najnovšie trendy v prílive priamych zahraničných investícií na Slovensko , 2010 .

[31]  L. Mátyás,et al.  Trade-Enhancing EU Enlargement and the Resurgence of East-East Trade , 2010 .

[32]  S. Redding.  Dynamic Comparative Advantage and the Welfare Effects of Trade , 1997 .

[33]  D. Greenaway,et al.  Revealed Comparative Advantage , 1993 .

[34]  M. Friedman.  Do Old Fallacies Ever Die , 1992 .

[35]  Philippe Monfort,et al.  Convergence of EU regions Measures and evolution , 2022 .