Comparative Advantages in CEEC-5

The structure, geography, and organization of world trade have dramatically changed in the last decades with the emergence of new global competitors and the decline of old ones. Global Value Chains are probably the most prominent feature of this new landscape and the growth of these chains is posing new challenges to studies of international trade and countries’ competitiveness. Some traditional measures may be of little use since they hinge on the assumption that all activities in the production of a good take place in the local economy, using domestic inputs only. Furthermore, export indexes based on gross flows become less meaningful as part of its value is made of imported inputs. Previous applied research uses a wide array of statistical tools to assess international specialization and trade performance but focuses is on Gross Exports. These analyses can be very misleading due to double counting of trade in intermediate inputs. This paper would like to shed light on the export structure and competitiveness in five Central and Eastern European Countries during 1995-2011. I assess which sectors enjoy a comparative advantage in 1995-2011 using Gross Exports and Value Added in Trade data. The sets of competitive industries are compared and discussed. There are some noticeable differences in these indicators in Hungary and Slovakia, while just a few in Romania and Bulgaria.