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Volume 4
Issue 1
Online publication date 2011-01-14
Title Lithuanian export competitiveness before economic recession
Author Jone Kalendiene, Giedrius Miliauskas
Abstract The research paper discusses the concept of competitiveness of economy and analyzes export as an indicator of it. The analysis is started by the historical review of export development. Statistical data show that three Baltic countries have been following different path of export growth since Russian crisis. Different export market orientation and manufacturing sector's longer reorientation process provide an explanation. Furthermore, the historical analysis shows that export growth relation with foreign demand growth and GDP growth is not as strong as it might be expected. In order to estimate possible long-run GDP growth prospects, the structural analysis of trade is performed. The conclusions of the latter revealed high dependence of trade on conjuncture in foreign markets and supported the need of further price and non-price competitiveness analysis. Surprisingly, the results of the former indicate that price indicators do little to explain export development. Conversely, the results of the latter, based on CMSA methodology, show that market orientation of Lithuanian exports adds the most to its competitiveness; meanwhile the product orientation is generally unfavorable. Finally, the relation between FDI structure by countries and trade flows of processed industrial supplies is analyzed. Although data analysis does not reject the existence of such hypothesis, a more detail analysis should be conducted in the future.
Citation
References
Carlin, W., Glyn, A., Van Reenen, J., 1999. “Export market performance of OECD countries: An empirical examination of the role of cost competitiveness,” IFS Working Paper Series, No.W99/21

Ca’Zorzi, M., Schnatz, B., 2007. “Explaining and forecasting euro area exports: What competitiveness indicator performs best?” ECB Working Paper Series, No.833

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ECB, 2005. “Competitiveness and the export performance in the Euro area,” ECB Occasional Paper Series, No.30

European Commission, 1999. Sixth Periodic Report on the Social and Economic Situation of Regions in the EU, Brussels: European Commission.

Fabrizio, S., Igan, D., Mody, A., 2007. “The dynamics of product quality and international competitiveness,” IMF Working Paper, No.WP/07/97

Krugman, P., 1996. “Making sense of the competitiveness debate,” Oxford Review of Economic Policy, No.12

Neary, J., 2006. “Measuring competitiveness,” IMF Working Paper, WP/06/209

Porter, M., 1998. The competitive advantage of nations, New York: Palgrave

Stahn, K., 2006. “Has the impact of key determinants of German exports changed? Results from estimations of Germany’s intra euro-area and extra euro-area exports,” Deutsche Bundesbank, Discussion Paper Series 1: Economic Studies, No. 07/2006

Keywords Competitiveness, export, foreign direct investment, structure effect, trade analysis
DOI http://dx.doi.org/10.15208/beh.2011.4
Pages 40-51
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