1. bookVolume 11 (2016): Issue 2 (December 2016)
Journal Details
License
Format
Journal
eISSN
2233-1999
First Published
04 Mar 2008
Publication timeframe
2 times per year
Languages
English
access type Open Access

Competitiveness, Trade with the EU and Labour Markets: Challenges for the Western Balkans

Published Online: 30 Dec 2016
Volume & Issue: Volume 11 (2016) - Issue 2 (December 2016)
Page range: 20 - 32
Journal Details
License
Format
Journal
eISSN
2233-1999
First Published
04 Mar 2008
Publication timeframe
2 times per year
Languages
English
Abstract

This paper focuses on the relationship between exporting and the labour markets of the Western Balkan economies within a macroeconomic and microeconomic framework. Within the macroeconomic framework we investigate the Western Balkan countries’ evolution of the bilateral intra-industry trade share with European Monetary Union members and compare this with the differences in bilateral unit labour cost dynamics. The microeconomic analysis rests on enterprise-level cross section data collected during the crisis period and investigates whether exporters help to create additional jobs in the region in comparison to entrepreneurs oriented towards national market. The results show that trade patterns between Western Balkan economies and EMU trading partners did not exhibit any significant changes in trend. On the other hand, it seems that during the recession period most Western Balkan economies adjusted their unit labour costs, probably in order to boost competitiveness. Microeconomic analysis revealed that, although there are some positive differences between exporters and non-exporters, exporters do not create additional employment.

Keywords

JEL Classification

Abd-el-Rahman, K. 1991. Firms’ competitive and national comparative advantages as joint determinants of trade composition. Weltwirtschaftliches Archiv 127 (1): 83–97.10.1007/BF02707312Search in Google Scholar

Altomonte, C. and Békés, G. (ed.) 2016. Measuring competitiveness in Europe: resource allocation, granularity and trade. Bruegel Blueprient Series No. 24.Search in Google Scholar

Andersson, L., Gustafsson, O. and Lundberg, L. 2000. Structural Change, Competition and Job turnover in the Swedish Manufacturing Industry 1964-1996. Review of International Economics 8 (3): 566-582.10.1111/1467-9396.00242Search in Google Scholar

Berglof, E. 2015. New structural economics meets European transition. Journal of Economic Policy Reform 18 (2): 114-130.10.1080/17487870.2015.1013543Search in Google Scholar

Bernard, A. B. and Jensen, J. B. 1995. Exporters, Jobs, and Wages in U.S. Manufacturing: 1976-1987. Brookings Papers on Economic Activity, Microeconomics 1995: 67-112.Search in Google Scholar

Bjelić, P. 2015. Building Competitiveness and Increasing Trade Potential in the Western Balkans: Policy Making in Preparing for European Integration. In Public Policy Making in the Western Balkans, edited by M. Thomas and V. Bojicic-Dzelilovic, 69-89. Netherlands: Springer.10.1007/978-94-017-9346-9_4Search in Google Scholar

Bjelić, P., Jaćimović, D. and Tašić, I. 2013. Effects of the world economic crisis on exports in the CEEC: focus on the Western Balkans. Economic annals LVIII (No. 196): 71-98.10.2298/EKA1396071BSearch in Google Scholar

Blundell, R. and Costa Dias, M. 2008. Alternative approaches to evaluation in empirical microeconomics. CEMMAP Working Paper No. CWP26/08.10.1920/wp.cem.2008.2608Search in Google Scholar

Botrić, V. 2012. Intra-industry Trade between the European Union and Western Balkans: A Close-up. EIZ Working Paper No. EIZ-WP-1202.Search in Google Scholar

Brülhart, M. 2000. Dynamics of Intra-Industry Trade and Labour-Market Adjustment. Review of International Economics 8 (3): 420-435.10.1111/1467-9396.00232Search in Google Scholar

Brülhart, M. and Elliott, R. J. R. 1998. Adjustment to European single market: inferences from intra-industry trade patterns. Journal of Economic Studies 25 (3): 225-247.10.1108/01443589810215360Search in Google Scholar

Brülhart, M., Elliott, R. J. R. and Lindley, J. 2006. Intra-Industry Trade and Labour-Market Adjustment: A Reassessment Using Data on Individual Workers. Weltwirtschaftliches Archiv 142 (3): 521-545.10.1007/s10290-006-0079-3Search in Google Scholar

Bussière, M., Fidrmuc, J. and Schnatz, B. 2005. Trade integration of Central and Eastern European countries: lessons from a gravity model. ECB Working Paper No. 545.10.2139/ssrn.836424Search in Google Scholar

Clerides, S., Lach, S. and Tybout, J. 1998. Is learning by exporting important? Micro-dynamic evidence from Colombia, Mexico and Morocco. Quarterly Journal of Economics 113 (3): 903-948.10.1162/003355398555784Search in Google Scholar

Davis, D. R. and Harrigan, J. 2011. Good Jobs, Bad Jobs, and Trade Liberalisation. Journal of International Economics 84 (1): 26-36.10.1016/j.jinteco.2011.03.005Search in Google Scholar

Doms, M. E. and Jensen, J. B. 1998. Comparing wages, skills and productivity between domestically and foreign-owned manufacturing establishments in the United States. In Geography and Ownership as bases for economic accounting, edited by R.E. Lipsey, R.E. Baldwin and J.D. Richardson, 235-258. Chicago: University of Chicago Press.Search in Google Scholar

Ferto, I. 2007. The Dynamics of Trade in Central and Eastern European Countries. Managing Global Transitions 5 (1): 5–23.Search in Google Scholar

Fidrmuc, J. 2000. Restructuring European Union Trade with Central and Eastern European Countries. Atlantic Economic Journal 28 (1): 83-92.10.1007/BF02300533Search in Google Scholar

Fontagné, L. and Freudenberg, M. 1997. Intra-industry trade: methodological issues reconsidered. CEPII Working Paper No. 97-01.Search in Google Scholar

Frankel, J. A. and Rose, A. K. 1997. Is EMU more justifiable ex post than ex ante. European Economic Review 41 (3-5): 753-760.10.1016/S0014-2921(97)00034-2Search in Google Scholar

Frankel, J. A. and Rose, A. K. 1998. The Endogeneity of the Optimum Currency Area Criteria. Economic Journal 108 (449): 1009-1025.10.1111/1468-0297.00327Search in Google Scholar

Freudenberg, M. and Lemoine, F. 1999. Central and Eastern European Countries in the International Division of Labour in Europe. CEPII Working Paper No. 99-05.Search in Google Scholar

Grančay, M. Šumilo, E. and Vveinhardt, J. 2015. Trade in Central and Eastern European countries ten years after their EU accession – is there convergence? Society and Economy 37 (4): 443–460.10.1556/204.2015.37.4.2Search in Google Scholar

Greenaway, D., Hine, R. and Wright P. 1999. An Empirical Assessment on the Impact of Trade on Employment in the United Kingdom. European Journal of Political Economy 15 (3): 485-500.10.1016/S0176-2680(99)00023-3Search in Google Scholar

Helpman, E. and Krugman, P. R. 1985. Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy. Cambridge MA: MIT Press.Search in Google Scholar

Kathuria, K., ed. 2008. Western Balkan Integration and the EU - An Agenda for Trade and Growth. Washington D. C.: World Bank.10.1596/978-0-8213-7472-6Search in Google Scholar

Mayer, T. and Ottaviano, G. I. P. 2007. The Happy Few: The Internationalization of European Firms. New Facts Based on Firm-Level Evidence. Bruegel Blueprint Series No 3.10.1007/s10272-008-0247-xSearch in Google Scholar

Melitz, M. J. 2003. The Impact of Trade on Intra-industry Reallocations and Aggregate Industry Productivity. Econometrica 71 (6): 1695–1725.10.1111/1468-0262.00467Search in Google Scholar

Mojsoska-Blazevski, N. 2012. Challenges to successful policy in the region: towards more jobs, quality labour force and greater competitiveness. Western Balkan Investment Framework Discussion Paper, November.Search in Google Scholar

OECD 2009. The Impact of the Global Crisis on SME and Entrepreneurship Financing and Policy Responses. https://www.oecd.org/cfe/smes/43183090.pdf (accessed June 12, 2016).Search in Google Scholar

Sanfey, P., Milatović, J. and Krešić A. 2016. How the Western Balkans can catch up. EBRD Working Paper No. 186.10.2139/ssrn.3119685Search in Google Scholar

Van Beveren, I., Luppes, M., Rozendaal, L., Walthouwer, M., Alajääskö, P. and Roodhuijzen, A. 2016. Statistics on enterprise survival and growth prospects between 2008 and 2012. Statistics Explained. http://ec.europa.eu/eurostat/statistics-explained/index.php/Statistics_on_enterprise_survival_and_growth_prospects_between_2008_and_2012 (accessed June 12, 2016).Search in Google Scholar

Recommended articles from Trend MD

Plan your remote conference with Sciendo