No. 80. INVESTIGATION OF EXTERNAL TRADE AND EXPORT COMPETITIVENESS OF EUROZONE COUNTRIES. (in Greek)
I. Konstantakopoulou, T. Magdalinos, G. Skintzi. 2019. | ISBN: 978-960-341-124-6
This study investigates the export competitiveness of Euro Area countries. We use competitiveness indicators to identify a country’s sectors with comparative advantages (CAs), to “map” export sectors, and to examine whether the financial crisis affected the competitive position of the export sectors of each Euro Area country. In addition, we investigate the pattern of export specialisation and examine the relationship between comparative advantages and net exports. Finally, our study includes policy proposals that could lead Greece to improve its position in international trade.
We identified a large number of comparative advantages in several countries, such as Belgium, Spain, France, Austria, Germany, Italy, the Netherlands and Portugal, while fewer sectors with comparative advantages are observed in Cyprus, Ireland, Greece, Slovenia, and Finland. In addition, we note that countries with a large number of comparative advantages have the largest concentration of these in the group of Industrial Products. We also find that economies with high export performance accumulate comparative advantages in the sectors of Chemicals and related products (SITC 5), and Machinery and transport equipment (SITC 7).
The question to be investigated is whether the recent financial crisis has affected the competitiveness of exports of Euro Area countries. We are unable to draw a one-size-fits-all conclusion regarding the direction of changes. Regarding the number of CAs in each country, the findings are mixed. In particular, there is an increase in the number of CAs in Latvia, Portugal, Italy, the Netherlands, and Ireland, and a decrease in Greece, Slovenia, Slovakia, Belgium, and France.
Finally, the empirical analysis of the relationship between comparative advantages and net exports shows, first, that there is a long-run relationship in all the examined countries. The results indicate that the existence of comparative advantages in specific production sectors can positively affect net exports in these sectors. It is therefore of interest to policy-makers to follow policies that promote and enhance the sectors with comparative advantages. More specifically, the government could implement export promotion programs to facilitate the entry of domestic sectors with comparative advantages into the export market and enhance their export sales.