Analysis of the Competitive Position of EU Countries in Foreign Trade with the Use of the CMS and Ward’s Methods

Abstract

The purpose of the article is the multivariate analysis of export competitiveness in EU countries. It is based on the decomposition of changes in the exports of EU countries made using the model of Constant Market Share developed by Leamer and Stern (1970). The calculated effects of competitiveness, commodity composition, world trade and market distribution allow a detailed analysis of the sources of changes in export of compared countries, and in particular help to answer the question to what extent can changes in exports explain the global trade situation and to what extent do they result from proper proportion of market share, appropriate product assortment matching, or expansive exporter policy? In the comparative analysis there is used Ward's method, which allowed to indicate countries with the most similar competitive position in the spatial and commercial system in the field of goods with different shares of production factors. The presented results allow for a multidirectional comparison of the trade competitiveness of EU countries, as well as may be a source of important information on shaping the right proportions of participation and expansion of companies on foreign markets.