Foreign Trade Patterns Between Estonia and the EU
- 149 Downloads
In this paper, we focus on the development of the foreign trade flows between Estonia and the EU. We observe rapid reorientation of the trade flows from the former Soviet Union towards Western markets because of economic reforms and foreign trade liberalization. Moreover, we determine the commodity groups with a comparative advantage in the EU market and analyze its dynamics. Further analysis of the intra-industry trade (ITT) shows that vertical IIT plays a dominant role in Estonian-EU IIT flows. Shares of total, vertical, and horizontal IIT have grown rapidly since 2004, the year of accession to the EU.
KeywordsEstonia Comparative advantage Vertical/horizontal intra-industry trade
- De Benedictis, L., & Tamberi, M. (2001) A note of the Balassa index of revealed comparative advantage. Quaderni di ricerca 158, Department of Economics, University og Ancona.Google Scholar
- Grubel, H. G., & Lloyd, P. J. (1975). Intra-industry trade. The theory and measurement of international trade in different products. London: The Macmillan Press Ltd.Google Scholar
- Falvey, R., & Kierzkowski, H. (1987). Product quality, intra-industry trade and (Im)perfect competition. In H. Kierzkowski (Ed.), Protection and competition in international trade. Oxford: Basil-Blackwell.Google Scholar
- Fertö, I. (2005a). Vertical and horizontal intra-industry trade in milk products in the EU. The Northern European Food Industry - challenges and transitions from an economic perspective. NJF seminar no 381.Google Scholar
- Ferto, I. (2007). The dynamics of trade in central and Eastern European countries. Managing Global Transition, 5(1), 5–23.Google Scholar
- Fontagné, L., & Freudenberg, M. (1997). Intra-Industry Trade: Methodological Issues Reconsidered. Document de travail. 97-01, CEPII, Paris.Google Scholar
- Greenaway, D., Hine, R. C., & Milner, C. R. (1994). Country-specific factors and the pattern of horizontal and vertical intra-industry trade in the UK. Adelaide: University of Adelaide.Google Scholar
- Hoen, A., & Oosterhaven, J. (2004). On the measurement of comparative advantage. SOM-reports University of Groningen, http://irs.ub.rug.nl/ppn/265445132.
- Moenius, J. (2006). Measuring comparative advantage: a ricardian approach, University of Redlands, http://www.haveman.org/EITI07/moenius.pdf.
- Stiglitz, J. (1987). The causes and the consequences of the dependence of quality on price. Journal of Economic Literature, 25(1), 1–48.Google Scholar
- United Nations Conference on Trade and Development (UNCTAD). (2002). World investment report 2002. New York and Geneva: UN.Google Scholar
- Viner, J. (1950). The customs union issue. New York: Carnegie Endowment for International Peace.Google Scholar
- Statistics Estonia. Statistical e-Database. http://pub.stat.ee