Search

The participation of manufacturing in the GVA of many advanced economies is continuously decreasing. The purpose of this work is to contribute to the dialogue around the drivers of such trend. In order to do so, we use input-output analysis for decomposing the variation in the manufacturing share as the sum of the effects of the variation of various possible drivers of deindustrialization: prices, domestic demand, technology and external trade; and we calculate these effects through a dynamic-hierarchical structural decomposition analysis. As a result of the analysis, we identify certain regularities: (a) variations in prices and domestic demand are the two most important factors explaining deindustrialization; (b) a process of substituting domestic production by imports also contributes to deindustrialization; (c) exports make a positive contribution to the participation of manufactures in the GVA but, after the 2008 crisis, this contribution does not offset the negative contribution of substitution by imports. [ABSTRACT FROM AUTHOR]

Highlights • Effects of trade liberalization on manufacturing export transformation in central European new EU member states are examined. • Alternative export evolution scenarios over 1990–2015 period are constructed using synthetic control method. • Trade liberalization of 1990s improved export performance, quality and technological intensity of exports. • The magnitude of effects depends on the speed of trade liberalization. • Robustness of findings is confirmed with sensitivity analysis. Abstract Prior to 1990s Baltic and Central European new member states of the European Union (NMS) have mainly exported to markets of other centrally planned economies. The exception from this were Croatia and Slovenia whose more liberal institutional setting and existence of economic relationships with market economies resulted in sizeable portion of exports being directed to Western European markets. The aim of this paper is to explore the effects of trade liberalization with European Union on changes in the structure and quality of exports from NMS in the period 1990–2015. Results obtained using synthetic control method (SCM) signal that the timing of trade liberalization with the European Union shaped the evolution of export performance, structure and quality of exports from NMS. The most advanced NMS managed to reap full benefits of preferential access to EU markets. The effects on countries that later embarked on this process, Slovenia and in particular Croatia have been several times smaller. Trade liberalization increased quality of exports and the share of high technology intensive industries in its structure across all NMS. Robustness of findings is confirmed through sensitivity analysis. [ABSTRACT FROM AUTHOR]

This paper theoretically constructs a simple model to study the effect of the structure of employment on the external trade balance. The paper illustrates that when the share of employment in services increases, the external trade deficit also increases, and this occurs due to the direct effect of the income and the indirect effect of the productivity. Empirically, the paper analyzes the effects of the structure of employment upon the external balance of goods and services in the panel dataset of 137 developing and developed countries for the period from 1960 to 2011. The paper finds that the external trade deficit has been rising with a higher share of the employment in services. [ABSTRACT FROM AUTHOR]

Abstract: Free trade has been a universally accepted economic tenet for almost two centuries. Despite challenges, Ricardo''s theory of comparative advantage has proven to be one of the most enduring of all economic laws. In recent decades, however, the liberal trading system has come under increasing attacks in the form of strategic trade and industrial policies, the deindustrialization in advanced countries, rapid globalization and outsourcing, and others. This paper reviews each of these attacks and concludes that they do not justify abandoning or moving away from the general preference of a liberal trading system. [Copyright &y& Elsevier]