The Reorientation of Transition Countries' Exports: Changes in Quantity, Quality and Variety

Abstract

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 Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. A fter the fall of socialism, the formerly socialist countries undertook a series of reforms towards establishing functioning market economies. Most noteworthy of these reforms is the extensive trade liberalisation, the purpose of which was to realign domestic relative prices with world prices, and to resume international trade with the countries' natural trade partners. Terms of use: 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...

Gravity Approach for Modelling International Trade in South-Eastern Europe and the Commonwealth of Independent States: The Role of Geography, Policy and Institutions

“…2 See Landesmann and Szekely (1995), Kaminski (1996), Brenton and Gros (1997), Michalopoulos and Tarr (1997), Havrylyshyn and Al-Atrash (1998), Sheets and Boata (1998), Buch and Piazolo (2001), Djankov and Freud (2002), Fidrmuc and Fidrmuc (2003), EBRD (2003), Babetskaia- Kukharchuk and Maurel (2004), Freinkman et al (2004), Broadman (2006), Bussiere et al (2008), Caporale et al (2009) and Rault et al (2009). A detailed analysis of export reorientation in transition economies is provided by Kandogan (2006); for a study of trade reorientation on the enterprise level, see Winiecki (2000).…”

Agro-food exports variety from the Central and Eastern European countries

“…Their empirical results indicate that the tariff liberalisation is important in the expanding export variety. Kandogan (2006) investigates the role of the product variety to explain the export growth of transition countries. he finds that opening up to new trade partners, at first, increases the number of sectors in which the trade occurs.…”

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“…: Lendesmann and Szekely 1995;Kamiński 1996;Kamiński, Wang and Winters 1996;Brenton and Gros 1997;Winiecki 2000a;Djankov and Freund 2002;Kandogan 2006). Such studies had been especially popular during the last decade of the 20th century, due to the necessary reorientation of Central and Eastern European countries' exports and the need to change their previous trade partners originating from the Council for Mutual Economic Assistance to those coming from market economies in general and neighbouring European Union countries in particular.…”

“…The first group is focused on the analyses of the mentioned phenomenon by the use of the gravity models (see Lendesmann and Szekely 1995;Kamiński 1996;Brenton and Gros 1997;Winiecki 2000a;Djankov and Freund 2002;Kandogan 2006). In particular, those studies tried to assess the export potential of the cee countries to market economies, by taking into consideration for example: transportation costs, demand and supply conditions, gdp of partner countries, common language, etc.…”