Structural change and convergence of Central and Eastern European Countries

Supported by the funds of the Oesterreichische Nationalbank (Anniversary Fund, project number: 15482)

Funding: EUR 70.000,00

2014-2018

The analysis of trade geography is a fundamental strand of applied international trade literature. That analysis is conducted by frequently isolated research avenues. This research program considers some of the most important of these dimensions. The core idea of the project is that several of the methodologies that are widely used in these areas suffer from serious limitations, thus conditioning the reliability of their conclusions. Two types of limitations can be identified. First, in some cases, there is an inconsistency between the concept assumed and the measures used, which do not make a correct or at least sufficient evaluation of the phenomenon. Second, in other cases, the concept assumed does not capture critical characteristics of the phenomenon.
The first fundamental objective of this project is to contribute to minimize these limitations. We concretize this by:
- Proposing new methodological approaches for the measurement of globalization, internationalization and trade competition, which overcome the conceptual and methodological gaps evident in some of the most frequently used approaches;
- Deepening an approach recently proposed to evaluate structural similarity and extending it to the evaluation of structural convergence;
- Presenting a new indicator of economic centrality and 2 methods for its decomposition into economically interpretable effects;
- Testing through alternative approaches the influence of a geographical effect in the competitive patterns of the countries.
Our second objective is to deepen the empirical relationship between the profound alterations in the international economic context, marked by significant changes in trade costs, and the evidence obtained for the several dimensions of trade geography analyzed. To that end, the results obtained from the new methodologies will be compared with those emerging from traditional approaches.