Business cycle synchronisation and the similarity in the sectoral structure of exports are key conditions for the successful implementation of common monetary policy, as shown by the theory of Optimum Currency Areas. This paper examines the degree of correlation between the aggregate euro area and 12 member states’ business cycles and the role of their exports specialisation dynamics vis-à-vis the euro area over the period 1981–2012, focusing in particular on Southern European countries. Overall, we find that since the inception of the European Monetary Union, the business cycles of euro area member states have been increasingly synchronised with the aggregate euro area cycle, with the exception of Greece. We also document that changes in the Greek, Portuguese, and Spanish export structures brought these countries closer to the euro area structure as a whole. Furthermore, we find a positive and significant relationship between the similarity of export structures and GDP cyclical correlations.
The paper investigates the role of regionalization and regional identity in the endeavours of emerging economies to connect successfully to the global world economy. It addresses the question of whether the Association of Southeast Asian Nations (ASEAN), with its loose institutional integration framework, has contributed to the global integration of its very heterogenous members in the first decade of the 21st century — and, if so, what are the drivers behind this. The paper summarizes connecting theories, using a multidisciplinary approach, and uses descriptive statistical analysis to identify the achievements of the ASEAN-6 countries within global trade and foreign direct invesment (FDI) flows in the given time period. We suggest that ASEAN countries, with their efforts to initiate interconnecting regional organizations in Asia, most specifically the ASEAN+3 (APT) construction, did contribute to greater integratedness of member countries; and they have created a regional image with a common market and production base. Such achievements, however, can be in great part attributed to the micro-level activities of international and regional firms wishing to establish cross-border production networks in these countries.
Authors:Martin Grančay, Ērika Šumilo, and Jolita Vveinhardt
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.
Authors:Ewa Cieślik, Jadwiga Biegańska, and Stefania Środa-Murawska
This article presents the transformation of foreign trade in 10 post-socialist countries, current members of the EU. Special focus is given to the more significant role these countries began to play in global value chains (GVCs) as a result of liberalisation processes and integration within the EU. In addition, the article evaluates their place in global vertical specialisation. To locate each country on a global value chain and to compare them with selected countries, more complex methods of measuring the level of participation of European post-socialist countries in GVCs were employed. These methods allow the position of a country downstream or upstream in GVCs to be established. We concluded that (a) post-socialist countries differ in the levels of their participation in GVCs. Countries that have stronger links with Western European countries, especially with Germany, are more integrated; (b) a large share of post-socialist countries’ exports pass through Western European GVCs; (c) most exporters in Central and Eastern Europe are positioned in downstream segments of production rather than upstream markets.
This essay attempts to go beyond presenting the bits and pieces of still ongoing crisis management in the EU. Instead it attempts at finding the ‘red thread’ behind a series of politically improvised decisions. Our fundamental research question asks whether basic economic lessons learned in the 1970s are still valid. Namely, that a crises emanating from either structural or regulatory weaknesses cannot and should not be remedied by demand management. Our second research question is the following: Can lacking internal commitment and conviction in any member state be replaced or substituted by external pressure or formalized procedures and sanctions? Under those angles we analyze the project on establishing a fiscal and banking union in the EU, as approved by the Council in December 2012.
This paper tests a neo-Heckscher-Ohlin versus a neo-Ricardian framework for explaining vertical intra-industry trade. The study applies panel techniques with instrument variables to analyse trade between ‘old’ EU and 10 Central-East European countries in their post-transition period. Results show country-pair fixed effects to be of high relevance for explaining vertical intra-industry trade. Technology differences are positively, while differences in factor endowment, measured in GDP per capita, are negatively correlated with vertical intra-industry trade, and confirm the relevance of the neo-Ricardian approach. In addition, changing bilateral differences in personal income distribution during the transition of Central-East European countries towards a market economy contribute to changes in vertical intra-industry trade.
As part of a wider research program, we analysed the theoretical framework and the recent developments of the process of internationalization (transnationalisation) of the small- and medium-sized enterprises in Spain. The paper highlights the main trends and barriers of this internationalization process. Methodology included document analyses, interviews, and the analyses of statistical databases.
The paper analyzes European Union – Middle East and North Africa (EU-MENA) relations from the perspective of complex interdependencies. As a theoretical framework, it outlines the application of Barry Buzan’s Security Complex Theory on the Euro-Mediterranean (or EU-MENA) region-pair. This involves the provision of a general overview on the several sectors of interdependence between the two regions, namely the military, political, economic, societal and environmental sectors. The paper then turns towards the deeper elaboration of the economic sector and identifies it as the most potent sector for European activism, where the Union could work most effectively on building a long-term solution for the stabilization of the MENA. As conclusions, the paper argues for a deeper economic integration between the two regions, which would provide opportunities for the MENA’s population to be economically successful “at home”, therefore reducing not only the highly visible migration pressure on the EU, but also other security threats such as civil wars, organized crime and weapon proliferation.
This paper evaluates income convergence in the European Union, between “old” (EU15) and “new” member states from Central and East Europe (CEE10), and among the countries within these two groups. The GDP per capita convergence should be expected according to the exogenous economic growth model and neoclassical trade theory. The presence of σ-convergence and both absolute and conditional β-convergence is tested for on a sample of 25 European Union countries (EU25). Results confirm the existence of β-convergence of GDP per capita at purchasing power parity among EU25, but not among EU15 and CEE10 countries. σ-convergence has been confirmed among EU25 and CEE10 countries, while GDP per capita has been diverging in the EU15 group of countries. Moreover, the results reveal that recent economic crisis has reversed long-term tendencies and led to income convergence within EU15 and divergence within CEE10. During the crisis, the income differences among the EU25 countries have increased, but the scope and duration of this effect has been limited and has not affected the long term convergence path. However, the obtained long term speed of convergence is significantly lower compared with the previous researches.
This paper investigates the relationship between industrial restructuring and regional unemployment in Poland. Poland’s regional unemployment broke out of nothing at the beginning of the 1990s decade. Since then, it has remained remarkably unchanged over the decade for a variety of factors, such as the gradual restructuring process, labour supply rigidities and technological differences. The role of each of these factors is assessed within the framework of hazard functions applied to the inflow to unemployment from a job, computed using Polish Labour Force Survey data. When voivodships are grouped according to their unemployment rate it can be seen that low unemployment voivodships form a heterogeneous group, including both rural and urban areas. Applying a new method of analysis of the labour market effects of trade integration, the paper reveals circumstantial evidence on how Poland’s international comparative advantages in labour-intensive manufacturing combine with the economic advantages of urbanised regions to play a significant role in shaping the regional distribution of Poland’s unemployment.