Modelling trade specialisation of Slovakia and Czechia in automobile industry

This paper proposes an innovative approach to modelling trade specialisation of Slovakia and Czechia. These countries have a limited export structure concentrated mainly on machinery and transport equipment that require recent technologies and are subject to continuous automation. We aimed to identi...

Full description

Saved in:
Bibliographic Details
Published in:The journal of international trade & economic development 2022-02, Vol.31 (2), p.181-203
Main Authors: Sergi, Bruno S., Pitoňáková, Renáta
Format: Article
Language:English
Subjects:
ARDL
asymmetry
Automobile industry
Competitiveness
Foreign exchange rates
Human capital
International trade
Motor car industry
Motor cars
NARDL
Population growth
revealed comparative advantages
revealed competitiveness
Specialisation
Specialization
Citations: Items that this one cites
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper proposes an innovative approach to modelling trade specialisation of Slovakia and Czechia. These countries have a limited export structure concentrated mainly on machinery and transport equipment that require recent technologies and are subject to continuous automation. We aimed to identify factors that impact Slovakia's and Czechia's performance in the automobile industry on the EU-28 market using the Auto Regressive Distributed Lag Approach. The Vollrath indicator of the revealed competitiveness (Vollrath 1987) demonstrates specialisation, representing a modification of the Balassa index of revealed comparative advantages (Balassa 1965). The paper shows compelling evidence of long-and-short-run asymmetry between trade specialisation and the real effective exchange rate in Slovakia. The results suggest that the Czech competitiveness in the automobile industry does not fall with a higher effective exchange rate. Other factors such as human capital and country size bolster the theoretical assumptions and show the over specialisation of both countries and chances to be less specialised with higher population growth. This paper's findings have a broader context and application for countries focusing primarily on manufacturing road vehicles.
ISSN:0963-8199
1469-9559
DOI:10.1080/09638199.2021.1961846