Identification of export potential in foreign trade: case of Slovakia in Kazakhstan

Abstract

For small open economies such as Slovakia, foreign demand is a significant factor in economic growth. Since Slovakia acceded to the European Union, its exports have focused primarily on the EU internal market. Therefore, one of its goals is to diversify the territorial structure of foreign trade. Kazakhstan is the economic engine of Central Asia, which has made significant efforts in recent years to transform its economy. The aim of the case study of the Slovak Republic is to examine its export opportunities to Kazakhstan using selected one-factor indicators of competitiveness based on their mutual foreign trade. The imbalance in Slovakia-Kazakhstan’s foreign trade suggests sizable reserves. The work evaluates their foreign trade relations through indices of trade intensity, complementarity, and intra-industry trade. It identifies the export potential of Slovakia based on the concept of revealed comparative advantages and import significance of Kazakhstan in the examined period. In 2020, The export potential was used only at 2%, the export gap was 95,928 mil. EUR and concerned 56 commodities at the level of HS 4 aggregation. Considering the geographical distance and costs, Slovakia should focus on the export of goods with higher added value.