ArticleThe reorientation of transition countries' exports: Changes in quantity, quality and variety
IntereconomicsSuggested Citation: Kandogan, Yener (2006) : The reorientation of transition countries' exports: Changes in quantity, quality and variety, Intereconomics, ISSN 0020-5346, Vol. 41, Iss. 4, pp. 216-229, http://dx.doi.org/10.1007/s10272-006-0189-0 This Version is available at: http://hdl.handle.net/10419/41929
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Documents inThe initial opinion shared by many in Europe was that the liberalisation efforts would not succeed: transition countries produced very few varieties of low quality goods that they could not possibly export to market economies. Contrary to this opinion, there has been a considerable reorientation of exports towards neighbouring European Union (EU) countries, especially in the Central and East European countries (CEEC), away from their partners in the Council for Mutual Economic Assistance (CMEA). Consequently, their export volume has increased signifi cantly. This is considered an important condition for successful transition as it implies a signifi cant restructuring of production.The natural question is the source of the increase in exports to market economies. According to Hummels and Klenow, 1 in general an increase in export volume could be the result of three factors: the intensive margin, where the same set of goods is exported in larger volumes; the extensive margin, where a larger set of goods is exported, and fi nally, higher quality goods. The answer is critical in determining the extent of restructuring achieved, and thus the success of transitional reforms. Furthermore, the effects of each factor on countries' terms of trade and thus welfare are very different. Lastly, from a theoretical point of view, the answer is needed for determining the features of trade models that correspond better to data from transition countries.In an attempt toward an answer, the exports of CEEC and the Commonwealth of Independent States (CIS) are analysed in this paper. The focus is on their manufacturing exports to partners outside the former CMEA du...