BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
Trade and Revealed Comparative Advantage: Hungary, the Czech Republic, and the European Union
Abstract: This study analyses the trade of Hungary and the Czech
Republic with the European Union in 1997. After a general introduction, the
focus turns to the extent of intra-industry trade (IIT) and its horizontal
and vertical components. The extent of IIT is also analysed in light of the
flows of foreign direct investment (FDI) from the European Union to Hungary
and the Czech Republic. This is followed by an analysis of revealed
comparative advantage (RCA) in trade between the EU and the two Central
European countries. The CN4-digit trade data is divided into two groups
according to whether a country enjoys a revealed comparative advantage in a
given market area or not. Statistical tests are performed to determine the
extent to which the RCA structures of each pair of countries are dependent.
The analysis also takes into account the volumes of trade flows.
Keywords: revealed comparative advantage; intra-industry trade; Hungary; Czech Republic; EU; (follow links to similar papers)
61 pages, September 14, 1999
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