OVERVIEW OF EXPORT PERFORMANCE OF ‘NEW EUROPE’: Theoretical Underpinnings and Empirical Evidence The Second Lancut Economic Forum on ‘New Europe’ Matija.

OVERVIEW OF EXPORT PERFORMANCE OF ‘NEW EUROPE’: Theoretical Underpinnings and Empirical Evidence

The Second Lancut Economic Forum on ‘New Europe’

Matija RojecUniversity of Ljubljana and [email protected]

Rzeszow, April 28, 2006

Objective and contents (1)

Objective: To overview existing theoretical and empirical literature on export performance of CEEC and analyze its determinants

Contents: Evidence in support of remarkable improvement of CEEC

export performance Theoretical underpinnings: gravity theory, comparative

advantages/factor abundancies approach, new trade theory

Complex (model) approach to analyzing CEEC export performance: gravity models, shift share analysis, export competitiveness analysis

Objective and contents (2)

Contents: Improved access of CEEC to EU markets Structural changes in CEEC exports Increased levels of productivity in CEEC The role of FDI in growing export performance of CEEC Transition from socialist to market economies: complete

change of institutional setting Conclusions

Who is ‘New Europe’: NMS-8, CC-3

Evidence in support of improvement of CEEC export performance (1) Unprecedented increase of exports in value terms

Increase of export intensity (exports to GDP ratio)

Increase of market shares abroad (CEEC exports in world & EU-15 imports)

Changed geographical distribution of exports: increased importance of EU-15 as export destination

Changes in product structure of exports: increased share of medium & high-tech products

Differences between NMS-8 and CC-3: the former show much better trends in export performance

Differences among individual countries but the direction of process is the same in all of them

Evidence in support of improvement of CEEC export performance (2)

GROWTH OF EXPORTS

Sources: UNCTAD, World Bank and WIIW (The Vienna Institute for International Economic Studies) data bases.

0

100

200

300

400

500

600

700

800

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

World EU-15 NMS-8 CC-3

VALUE (bn EUR) 1991 2004World 2825 7221EU-15 1202 2639NMS-8 32 209

CC-3 9 33

INDEX (1990=100)


GROWTH OF EXPORT INTENSITY (exports to GDP ratio)


0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

50,0

1995 1997 1998 1999 2000 2001 2002 2003 2004

World EU-15 NMS-8 CC-3


INCREASE OF MARKET SHARES ABROAD (exports as a share of world/EU-15 imports)


1990 1991 1995 2000 2004

Exports as a share of world imports EU-15 n.a. 41,1 39,4 33,6 35,5 NMS-8 1,11 1,11 1,54 1,80 2,81 CC-3 0,63 0,30 0,35 0,30 0,45Exports to EU as a share of total EU imports NMS-8 n.a. 1,54 2,53 3,69 5,38 CC-3 n.a. 0,28 0,47 0,52 0,78


CHANGED GEOGRAPHICAL DISTRIBUTION OF EXPORTS: increased importance of EU-15 as export destination


0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

NMS-8 CC-3


CHANGES IN THE PRODUCT STRUCTURE OF EXPORTS: increased share of medium and high tech products

0

5

10

15

20

25

30

35

40

Prim

ary

com

mod

ities

Labo

urin

tens

ive

&re

sour

ce b

ased

man

aufa

ctur

es

Low

ski

ll &

tech

nolo

gyin

tens

ive

man

ufac

ture

s

Med

ium

ski

ll &

tech

nolo

gyin

tens

ive

man

ufac

ture

s

Hig

h sk

ill &

tech

nolo

gyin

tens

ive

man

ufac

ture

s

NMS-10-1995

NMS-10-2004

EU-15-1995

EU-15-2004

Theoretical underpinnings for the explanation of CEEC export performance

Market access vs. supply capacity factors/determinants of CEEC export performance

Gravity theory is the most powerful explanatory tool => ‘trade between two countries is positively related to their economic size and development level and negatively to the distance between them’; plus other factors => Opening up of CEEC enabled gravity forces to act

Traditional explanations: Comparative advantages arising from different factor intensities/endowments => most of CEEC trade is still vertical intra-industry trade and inter-industry trade

New trade theory: economies of scale in (horizontal) intra-industry trade => horizontal intra-industry trade represents a smaller part of CEEC trade but is in the increase

Complex (model) approach to analyzing CEEC export performance (1)

Gravity models

‘Upgraded’ gravity models, distinguishing between market access and supply capacity factors

Shift share analysis

Analysis of export competitiveness

More or less descriptive analysis of factors behind growing export performance

Complex (model) approach to analyzing CEEC export performance (2): Gravity models

Gravity models are far the most popular and ‘strong’ approach (Collins and Rodrik 1991, Havrylyshyn and Pritchett 1991, Rosati 1991, Hamilton and Winters 1992, Baldwin 1994, Kaminski et al 1996, Jakab et al 2001, Havrylyshyn and Al-Atrash 1998, Egger 2003, Fidrmuc and Fidrmuc 2003, Bussiere et al 2005)

At the beginning of transition, CEEC trade with developed countries was much under the ‘normal’ level because of systemic barriers

Transition allowed gravity forces to act => geographical restructuring of trade along the lines of gravity theory: EU-15 as large, near, highly developed market assumed the role of the dominant trading partner

CEEC gradually approach to the ‘normal’ level of their trade with developed economies, especially the EU-15; differences among countries

Complex (model) approach to analyzing CEEC export performance (3): ‘Upgraded’ gravity models Use of gravity technique to estimate separately the contribution to

export growth of changed access to foreign markets and to what extent due to internal supply capacity (Redding and Venables 2003, 2004, Fugazza 2004: standard new trade theory model based on product differentiation derived from a constant elasticity of substitution demand structure)

Market access is further disagregated to particular regional grouping (within region, EU-15, for instance)

Internal supply capacity is regressed to GDP, population, internal transport costs, technological development, institutional factors (exchange rate fluctuations, risk of expropriation, labor market)

Market access seems to be more important than supply capacity for growing export performance of CEEC: Market access especially relevant in the beginning of transition Negative influence of post transition recession on supply capacity Supply capacity offers more room for further improvement

Complex (model) approach to analyzing CEEC export performance (3): ‘Upgraded’ gravity models

Components of export growth in CEEC included in Fugazza (2004) and Reddingand Venables (2003)

Period Exports growth Foreign marketaccess (FMA)

growth

Supply capacitygrowth

FMA growthwithin the

region

FMA growthoutside the region/Western Europe1

FUGAZZA: Eastern Europe and Central Asia2

1980-87 9 -2 7 -17 -11984-91 23 31 34 30 311988-95 4 80 -90 117 791992-99 66 -9 48 5 -9

REDDING AND VENABLES: Eastern Europe3

1970/73-1994/97 187 95 40 3 611970/73-1982/85 44 34 11 0 181982/85-1994/97 100 45 26 3 32Notes: 1/ 'Outside the region' in the case of Fugazza and 'Western Europe' in the case of Redding and Venables; 2/ Hungary, Poland,Romania, Bulgaria and Turkey; 3/ Albania, Bulgaria, Czechoslovakia, Hungary, Poland, Romania

Complex (model) approach to analyzing CEEC export performance (4): Shift-share analysis

Shift-share method decomposes export increase into: General demand component: Increase of demand in a host country

Structural effect component: Concentration of exports on goods with above average growth of import demand

Competitive effect component: Exports to a host country increase faster than that of competitors. This component is the main indicator of trends in country’s export competitiveness

In 1995-1999 (Havlik et al. 2001) increase of CEEC exports to EU-15 was: 42.1% due to general demand component

-8.1% due to structural effect component

66.1% due to competitive effect component

CEEC increased market shares in EU largely by raising competitiveness against other exporters to the EU-15 => this includes market access as well as supply capacity factors

Complex (model) approach to analyzing CEEC export performance (5): Index of export performance

Synthetic index of export performance (Kaminski et al 1996) is

determined by: Initial pre-transition conditions

Changes in access to Western markets

Policy stance as reflected in the reform process

The speed and scope of the reform process (stabilization and price liberalization) is the main determinant of CEEC export performance. Accordingly: Top performers: Visegrad countries and Estonia

Poor performers: Former Soviet republics (except Baltic states).

Other measurement of (export) competitiveness: WEF, IMD, Zinnes et al (2001), Havlik (2000)

Improved access of CEEC to EU markets

Gravity theory is the main explanation for increased importance of EU-15 as CEEC main export market => pre-transition level of trade with EU-15 was much under the ‘normal’ level’

Preferential access to EU-15 through EU integration process: How important for the improved position of CEEC on EU market: No econometric estimation so far

Three stages: (a) granting of MFN status (elimination of specific measures against state trading economies), (b) GSP (General System of Preferences), (c) Europe Agreements (EAs)

GSP important, EAs the most important and provided competitive edge over competitors from other countries (Kaminski 1994, Kaminski et al 1996)

Still GSP/EAs were not responsible for much of the export growth => Preferential treatment limited by a number of limitations (antidumping procedures, tight rules of origin, delays in liberalizing imports of sensitive products) (Kaminski 1994, Kaminski et al 1996)

Structural changes in CEEC exports (1)

Significant structural changes in CEEC exports since the beginning of transition: increased share of medium and high skill/technology intensive manufactures

To what extent has the structural upgrading contributed to the growing export performance? There is no such thing as ‘optimal economic structure’, what matters is the quality of structural changes….

…. But export growth of CEEC has been based on products that have not been exported in the pre-transition era and on significantly upgraded ‘traditional’ export items (Hoekman and Djankov, 1996)

Structural changes in CEEC exports (2):Increased level of intra-industry trade

The level of intra-industry trade (IIT) - driven by product differentiation and economies of scale- is frequently used quality indicator of trade: Vertical IIT: relatively big difference between unit values of

exported and imported goods; inequality of partners)

Horizontal IIT: low difference between unit values of exported and imported goods; equality of partners)

Relatively high level of industrialization, significant stock of human capital, geographic proximity and significantly lower real wages provide significant scope for rapid growth of IIT between CEEC and the EU-15

Structural changes in CEEC exports (3): Increased level of intra-industry trade

Indicators of intra industry trade of Central and Eastern European transitioncountries with the EU in 1995 and 1999 (Grubel-Lloyd indices1)

1995 1999 Index 99/95Bulgaria 0.401 0.401 100Czech Republic 0.645 0.729 113Estonia 0.440 0.475 108Hungary 0.578 0.606 105Latvia 0.290 0.271 93Lithuania 0.273 0.347 127Poland 0.455 0.508 112Romania 0.327 0.371 113Slovakia 0.534 0.553 104Slovenia 0.651 0.674 104Notes: 1/ GL = 1 – Σ ABS (x ij-mij) / Σ (x ij+mij); where xij and mij are country i’s exports and imports of 3-digit Standard Classification of Activities sector j.Source: Havlik et al. 2001: Table 6, p. 9.

Structural changes in CEEC exports (4):Increased level of intra-industry trade

Aturupane et al (1997): in 1990-95: 80%-90% of IIT between CEEC and EU was vertical

No trend of increasing share of horizontal IIT; the level of horizontal IIT less than half of that for Austria, Spain etc.

Soss (2002): In 1993-2000, the share of non-inferior IIT in CEEC ranged from 7% to 18% but increased considerably

Aturupane et al (1997), Hoekman and Djankov (1996), and Kaminski and Ng (2001): strong relationship between export performance and growth in vertical ITT with EU (fragmentation of production)

- The compositions of exports have moved towards high-technology industries- The picture as far as specialisation pattern within industries (segmenst) is not so clear- Unit values of exports have increased in nearly all industries and quality segments, in general

and in relation to EU imports- Some 'low-quality trap' trends can be found for the Baltics and Bulgaria & Romania

Central Europeancountries1

Bulgaria & Romania Baltic countries

1995 2000 Diffe-rence



Industry specialization pattern (export structure in %)Low-technology 24.6 16.0 -8.6 43.1 47.8 +4.7 43.5 37.8 -5.7High-technology 27.1 37.3 10.2 8.2 10.6 +2.4 4.9 10.1 +5.2

Specialization pattern within industries (export structure in %)Low-technology 100.0 100.0 100.0 100.0 100.0 100.0 Low-quality segment 28.6 33.3 +4.7 15.3 11.6 -3.7 26.8 25.4 -1.4 Medium-quality segment 26.9 27.4 +0.5 31.3 29.9 -1.4 29.5 30.1 +0.6 High-quality segment 44.5 39.3 -5.2 53.4 58.5 +5.1 43.6 44.6 +1.0High-technology 100.0 100.0 100.0 100.0 100.0 100.0 Low-quality segment 70.5 67.6 -2.9 62.4 67.3 +4.9 71.2 75.1 +3.9 Medium-quality segment 19.0 20.7 +1.7 26.3 23.9 -2.4 20.4 16.9 -3.5 High-quality segment 10.5 11.8 +1.3 11.3 8.8 -2.5 8.4 8.0 -0.4

Quality upgrading within quality segments of industries - unit values2 (current weights)Low-technology 19.4 18.1 -1.3 15.5 18.3 +2.8 13.6 17.3 +3.7 Low-quality segment 8.3 7.4 -0.9 6.3 8.3 +2.0 5.6 7.7 +2.1 Medium-quality segment 15.1 17.2 +2.1 12.2 15.5 +3.3 12.7 18.6 +5.9 High-quality segment 29.1 27.8 -1.3 20.2 21.8 +1.6 19.2 21.9 +2.7High-technology 12.1 18.8 +6.7 11.5 12.0 +0.5 10.8 16.5 +5.7 Low-quality segment 5.6 8.4 +2.8 6.2 5.7 -0.5 3.6 11.1 +7.5 Medium-quality segment 15.6 20.6 +5.0 9.3 16.4 +7.1 35.7 24.9 -10.8 High-quality segment 49.2 75.9 +26.7 46.1 48.3 +2.2 11.9 49.3 +37.4Source: Dulleck et al. (2004: Tables 1, 2, 3a, pp. 11, 12, 14).

Export specialization patterns and quality upgrading in ten CEEC(Dulleck et al 2004)

Structural changes in CEEC exports (5): Quality upgrading of CEEC exports

Increased levels of productivity in CEEC(1)

Productivity1 growth rates in NMS-8 and EU-15 in 1990-20031990-1995 1995-2003 1990-2003

Cumu-lated

Annualaverage

Cumu-lated

Annualaverage

Cumu-lated

Annualaverage

NMS-8Total economy 9.6 1.9 39.5 4.3 52.8 3.3Manufacturing2 n.a. n.a. 79.1 8.7 n.a. n.a.

EU-15Total economy 10.1 1.9 7.5 0.9 18.9 1.3Manufacturing2 16.4 2.2

GROWTH DIFFERENTIAL BETWEEN NMS-8 AND EU-15, in percentage pointsTotal economy -0.5 -0.1 32.0 3.4 52.8 3.3Manufacturing n.a. n.a. 62.7 6.5 n.a. n.a.Source: Havlik 2005: 3, 21.Notes: 1/ For total economy in terms of GDP per person employed, and for the manufacturing in terms of

gross value added in constant prices per employee; 2/ For manufacturing 1995-2002.

- No econometric analysis on the impact of productivity growth on exports inCEEC

- Bernard and Jensen (1998) for US: Productivity growth explains only app.10% of exports growth


L a b o r p r o d u c t iv ity p e r p e r s o n e m p lo y e d , G D P in P u r c h a s in gP o w e r S ta n d a r d s (P P S ) p e r p e r s o n e m p lo y e d r e la t iv e to E U -2 5

(E U -2 5 = 1 0 0 )

0

2 0

4 0

6 0

8 0

1 0 0

1 2 0

1 9 9 5

2 0 0 4

S o u rc e : K e y In d ic a to rs o n E U P o lic y – E c o n o m y a n d F in a n c e – N a tio n a l A c c o u n ts (E u ro s ta t) ,h ttp :/ /e p p .e u ro s ta t .c e c .e u .in t/p o r ta l/N o te : B u lg a r ia a n d C ro a tia fo r 1 9 9 6 -2 0 0 4 , a n d fo r R o m a n ia fo r 2 0 0 0 -2 0 0 4 .


Trends in wage competitiveness1 in NMS-8 and CC-3 in1995-2004

1995-2000 2000-2004 1995-2004Czech Republic 1.00 1.02 1.03Estonia 0.87 1.01 0.88Hungary 1.01 1.08 1.10Latvia 0.81 0.98 0.79Lithuania 0.94 0.89 0.84Poland 1.19 0.92 1.10Slovakia 0.96 1.01 0.97Slovenia 0.90 1.07 0.96Bulgaria 0.91 0.96 0.87Croatia 1.03 0.91 0.94Romania 0.89 0.83 0.74Source: WIIW data base.Note: 1/ Calculated as a ratio between growth of average annual gross wages in national currency and the growth of GDP peremployed person in national currency. Ratio higher than 1 means that growth of wages per employee overtakes the growth of GDP peremployee.

FDI and growing export performance of CEEC(1)

Contribution of FDI to CEEC exports is remarkable but the causal relationship between export propensity and strategic foreign ownership remains ambiguous

Consensus: Most of the difference between export propensity of foreign subsidiaries and domestic enterprises is explained by other factors, except ownership, including the multinationality (Pfaffermayer and Bellak 2000)

The case of Slovenia and Estonia: differences in export propensity between foreign subsidiaries and domestic enterprises are due to structural differences, which are reflected in different efficiency of factors utilization and productivity level. The superior export propensity of foreign subsidiaries is partly due to the factor of foreign ownership itself, which also embraces the effect of multinationality (Rojec et al. 2004)


Share of foreign subsidiaries1 in total manufacturing exports in selected NMS in1993-2001, in %

CzechRepublic

Estonia Hungary Poland Slovenia

1993 14,9 n.a. 52.2 34.6 n.a.1994 15.9 n.a. 65.5 25.3 21.11995 n.a. 25,4 68.3 32.6 23.21996 n.a. 32.5 73.9 39.5 25.81997 41.9 32.1 83.0 44.9 28.01998 47.5 35.2 85.9 52.3 32.91999 60.5 43.3 88.8 59.8 30.32000 62.5 44.9 84.7 63.8 34.22001 69.3 48.5 87.9 66.2 36.8 Of that High technology industries n.a. 76.0 97.6 89.9 47.0 Medium-high technology ind. n.a. 58.1 92.0 69.1 43.5 Medium-low technology ind. n.a. 39.4 72.3 49.7 23.1 Low technology ind. n.a. 43.7 69.3 68.5 35.7Source: WIIW data base.


Distribution of manufacturing exports of foreign subsidiaries1 and domestic enterprises bytechnology-defined groups of industries2 in Estonia, Hungary, Poland and Slovenia in 1993-

20013 (In %)

Foreign subsidiaries Domestic enterprises

0,0

10,0

20,0

30,0

40,0

50,0

60,0

1993 1994 1995 1996 1997 1998 1999 2000 2001

H MH ML L

0,0

10,0

20,0

30,0

40,0

50,0

60,0

1993 1994 1995 1996 1997 1998 1999 2000 2001

H MH ML L

Source: WIIW database.Notes: 1/ Enterprises with 10% or higher foreign equity share; 2/ H = High technology, MH = Medium-high technology, ML = Medium-low technology, L = Lowtechnology industries. They sum up to 100%; 3/ Hungary and Poland for 1993-2001, Estonia for 1995-2001 and Slovenia for 1994-2001.


Exports to sales ratio of foreign subsidiaries1 and domestic enterprisesby technology-defined groups of industries2 in Estonia, Hungary,

Poland and Slovenia in 1993-20013 (In %)

Foreign subsidiaries Domestic enterprises

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

1993 1994 1995 1996 1997 1998 1999 2000 2001

H MH ML L

…

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

1993 1994 1995 1996 1997 1998 1999 2000 2001

H MH ML L

Source: WIIW database.Notes: 1/ Enterprises with 10% or higher foreign equity share; 2/ H = High technology, MH = Medium-high technology, ML =

Medium-low technology, L = Low technology industries. They sum up to 100%; 3/ Hungary and Poland for 1993-2001, Estoniafor 1995-2001 and Slovenia for 1994-2001.

Transition - complete change of institutional setting - and growing export performance of CEEC(1)

Institutional quality has positive and significant effect on trade integration (Rodrik et al 2002)

Institutions in gravity models: business environment is important determinant of country’s export performance/costs of exporting (protection of property rights, risk of expropriation, labour market institutions, exchange rate etc. (Redding and Venables 2003, Rodrik et al 2002)

Specific situation of CEEC => They have gone through an overwhelming change of the entire socioeconomic system and building of institutions: Measured by EBRD Transition Indices


Overall, and foreign exchange and trade liberalization EBRD transitionindices for NMS-8 and CC-3 in 1991-2005

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

NMS-8 Average Overall Index NMS-8 Average Forex & trade index

CC-3 Average Overall Index CC-3 Average Forex & trade index

Source: EBRD 2000, 2002, 2003, 2004 and 2005.


Transformation from a centrally planned to a market economy has been the only really sine qua non of growing export performance => without that, the fundamentals of gravity theory would not be allowed to work

Even beyond this basic sense, the speed and scope of transition reforms have been crucial for the growth of export performance: Havrylyshyn and Al-Atrash (1998): geographic diversification of

CEEC exports to EU is greater more progress a country makes in structural reforms

Kaminski (1993): there is a close link between export performance and the decision to move quickly to a market-based economy


Kaminski et al (1996): While resource endowments, past patterns of production, and the pace of adjustment in different industries determine the trade patterns of a country, progress in macroeconomic stabilization and in establishing market-supporting institutions was perhaps the single most important factor determining foreign trade performance over the transitional period'

Instead of conclusion (1)

ijtitijtijtijt uS E Tb o rd erDIS TE X P lnlnln 3210

l n E X P i j t : : e x p o r t s ( l o g a r i t h m ) o f c o u n t r y i t o c o u n t r y jl n D I S T i j t : : d i s t a n c e ( l o g a r i t h m ) o f c o u n t r y i t o c o u n t r y jb o r d e r i j t : : b o r d e r d u m m yl n S E T i j t : : s e t o f v a r i a b l e s a f f e c t i n g e x p o r t s e c t o r c o m p e t i t i v e n e s s

E B R Dtra d eE B R DMHTUL CE RE MPF DIGDPGDPGDPS E T ,,,,,,,2,1,

G D P 1 : G D P o f e x p o r t i n g c o u n t r yG D P 2 : G D P o f i m p o r t i n g c o u n t rF D I : s t o c k o f F D I a s p e r c e n t a g e o f G D PE M P : e m p l o y m e n tE R : r e a l e x c h a n g e r a t eU L C : u n i t l a b o u r c o s t sM H T : s h a r e o f m e d i u m a n d h i g h t e c h / s k i l l i n t e n s i v e p r o d u c t s i n e x p o r t sE B R D : E B R D t r a n s i t i o n i n d e x ( a v e r a g e o f i n d i v i d u a l i n d i c e s )E B R D t r a d e : E B R D t r a n s i t i o n i n d e x f o r t r a d e a n d f o r e i g n e x c h a n g e s y s t e m


MARKET ACCESSlnEXP1 Coef. 1994 2000 2004 Coef. (EU)lnDIST1 -2.88**

(0.168)-3.22**(0.476)

-2.75** (0.345)

-2.06**(0.328)

-0.83** (0.438)

border -.1414701(0.829)

-.1640925(0.772)

-0.24(0.559)

-.24(0.531)

2.01**1.218)

_cons 35.00526**(1.379)

22.89(3.153)

Country dummies yes yes yesPartner dummies yes yes yesNumber of obs 15298 1020 1020 1020 2310Prob > F 0.0000 0.0000 0.0000Adj. R-squared 0.9315 0.9658 0.9635Note: standard errors in parenthesis, *statistically significant at 5%, ** statistically significant at 1%


MARKET ACCESSlnEXP1 Coef. 1995 2000 2004lnFMA 0.08** (0.003) 1.19**

(0.022)1.18** (0.016) 1.50** (0.116)

_cons 11.97**(0.106)

21.64**(0.220)

13.68** (0.047) 12.80** (0.268)

Number of obs 11187 1017 1017 1017Prob > F 0.0000 0.0000 0.0000Adj. R-squared 0.7405 0.8356 0.1408

Instead of conclusion (4)lnEXP1lnDIST1 -2.69**

(0.050)-2.17(0.046)

-2.49**(0.049)

-2.19**(0.046)

-2.71**(0.050)

-2.17**(0.046)

-2.15(0.046)

-2.19**(0.051)

-2.17**(0.046)

-2.15**(0.000)

lnGDP 0.30**(0.009)

2.26**(0.055)

2.47**(0.053)

2.41**(0.059)

lnGDP1 2.424537.0529736

2.44**(0.053)

0.29**(0.008)

0.29**(0.008)

0.29**(0.009)

2.41**(0.056)

2.24**(0.058)

lnGDP2 .2862562.007993

0.29**(0.008)

0.29**(0.008)

0.28**(0.000)

lnGDPpc1 1.13**(0.113)

lnGDPpc2 0.92**(0.021)

FDI4 0.02**(0.003)

0.04**(0.000)

lnEMP 1.11**(0.039)

0.271(0.065)

lnER1-2.51**(0.251)

lnULC1-0.53**(0.057)

-0.59**(0.105)

mht -0.001(0.006)

EBRDtrade 0.30**(0.299)

EBRDtot -1.48**(0.259)

cons 27.65**(0.482)

32.57**(1.357)

17.17c(1.016)

-33.2**(1.360)

26.24**(0.534)

-16.8**(2.072)

-31.43**(1.357)

-32.09**(1.529)

-33.36**(1.572)

-27.98**(1.754)

Number ofobs

11186 11186 11186 11186 11186 11186 11186 11186 11186 11186

Prob > F 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

Adj. R-squared

0.3010 0.4358 0.3439 0.4373 0.2868 0.4408 0.4401 0.4320 0.4358 0.4486

OVERVIEW OF EXPORT PERFORMANCE OF ‘NEW EUROPE’: Theoretical Underpinnings and Empirical Evidence The Second Lancut Economic Forum on ‘New Europe’ Matija.

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