Export competitiveness and the catch‐up process of Hungary (1996‐2001)

Abstract

PurposeThe purpose of this paper is to analyse the development of export competitiveness of Hungary and other new member countries of the EU (NMEs) prior to their accession. It also makes a contribution to the methodology of competitiveness measurement. It links competitiveness analysis to so‐called eclectic trade theories trying to synthesise different approaches to comparative advantage.Design/methodology/approachIntroductory theoretical remarks are followed by a survey of various techniques to measure competitiveness. It defines “fields of competitiveness” in order to gauge Hungary's relative positions vis‐à‐vis her main export competitors. The analysis of export competitiveness of these countries in their main markets within the EU‐15 is based on market shares between 1996 and 2001.FindingsThe most advanced economies of the sample including Spain, Hungary, Slovenia and the Czech Republic showed a “neo‐technological” type of competitiveness development. The “Heckscher‐Ohlin” path based on cheap labour and mass technologies was followed by Portugal, Poland or Turkey for example. The “Ricardian” path with a great degree of reliance on natural resources could be observed in the case of Ukraine and Bulgaria.Originality/valueThe paper makes a contribution to three fields of economics: the economics of transition, competitiveness analysis and trade theory. It proves that the catch‐up process of the NMEs brought about significant changes in their patterns of specialisation and competitiveness which is a feature of transition hitherto neglected by literature. Furthermore, it provides a proof to the so‐called eclectic model of trade theory introduced by Hirsch in the 1970s.