The revival of NMS mutual trade after their EU accession: in search of the reasons behind (project)

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The revival of NMS mutual trade after their EU accession: in search of the reasons behind

Client/Funding Institution

Anniversary Fund of the Oesterreichische Nationalbank

Abstract

Since their EU accession, mutual trade of the Central European new members has been expanding more dynamically than before 2004 and much faster than these countries’ trade with the ‘old’ EU members. The project’s target was to identify the reasons behind this phenomenon. First, changes in the structural features of these countries’ mutual trade before and after the 2004 EU enlargement were analysed; revealed comparative advantage, marginal intra-industry trade and intensive and extensive margins of trade indicators were calculated and interpreted. Second, the significance of foreign-owned enterprises’ presence in various industries and bilateral trade relations was investigated. Third, trade and FDI in services were scrutinised. Fourth, the potential of mutual trade was addressed with the help of a gravity model. Policy lessons for EU candidate countries and possible effects on Austria were discussed.