Trade Integration and Changing Trade Structures of Transition Economies

  • Michael A. Landesmann
Conference paper


This paper reviews some of the developments in transition economies of Central and Eastern Europe (CEECs) with regard to international trade specialization and the evolving pattern of the division of labor in an enlarged European Union (EU) and the patterns of interindustry and intraindustry specialization of these transition economies in relation to the EU. It shows that quite significant changes occurred in the patterns of interindustry specialization from 1989 to 1998 with marked differences across the CEECs. This type of analysis is then extended to an examination of the positions of CEE producers in intrabranch “product quality” competition. Again, marked changes are found over time in the quality of their products exported to the EU and, again, marked differences across these countries. The paper then examines possible reasons for the change in international trade specialization of the more successful economies: by looking at the pattern of productivity and wage growth across industrial branches, it finds that the pattern of comparative advantages of some of the CEE economies turns away from the lower-tech/low-wage industries and toward medium-tech to high-tech industrial branches. It shows that the dynamics of comparative advantage, which rely on uneven productivity catching up and a wage drift across branches, were also typical for the pattern of catching up of other successful groups of catching-up economies (southern EU economies and Asian economies).


European Union Transition Economy Trade Integration Intraindustry Trade Revealed Comparative Advantage 
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© Springer-Verlag Berlin Heidelberg 2002

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  • Michael A. Landesmann

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