Energy security as a source of international competitiveness in new EU member states

Abstract

Energy security and international competitiveness are two of the most fiercely discussed topics – especially in the light of the European Union (EU)’s dependence on Russia’s gas, oil, and coal. Both mentioned concepts are of special importance for the so-called EU new member states (EU NMS), which are undergoing the energy diversification process. The main goal of this paper is to analyze how energy security influences the international competitiveness of these countries. The study uses trade theories related to productivity differentials (Ricardian hypothesis) and differences in factor endowments (Heckscher–Ohlin hypothesis) as a basis for our econometric modeling. The results show that relative energy supply as well as physical and human capital relative endowments have a statistically significant impact on international competitiveness of the studied economies.