INVESTIGATION INTO THE SLOVAK TRADE SPECIALIZATION

Renáta Pitonáková
Prof., Comenius University in Bratislava, Faculty of Social and Economic Sciences, Slovakia
renata.pitonakova@fses.uniba.sk

Abstract

Foreign trade is important determinant of economic development. It expands consumption possibilities of a country. Specialization increases productivity and standard of living. Due to this it is of interest to analyse trade performance of a country and to investigate into its trade specialization patterns. The article focuses upon foreign trade of Slovakia analysing in greater detail its export structure within 2008-2017. Commodities were classified according to the Standard international trade classification (SITC) rev. 4; level 2. Calculations of Revealed comparative advantage (RCA) and Revealed symmetric comparative advantage (RSCA) identified sections for trade specialization on extra EU market. Results show the leading SITC commodity groups: 76 (Telecommunications and sound recording equipment) and 78 (Road vehicles). The RCA values for the SITC 76 achieving 3.51 in 2008 and 5.28 in 2017 demonstrate rising comparative advantages. The SITC 78 indicates a relative stable position on the market (values of 4.19 in 2008 and 3.98 in 2017). In order to provide for a more complex analysis of trade specialization the commodities were further on firstly categorized according to the WIFO taxonomy of manufacturing industries: Mainstream manufacturing; Labour intensive industries; Capital intensive industries; Marketing driven industries and Technology driven industries and then for each of these sections the RSCA values were calculated. The commodity group Technology driven industries (TDI) which includes among others new information and communication technologies as well as vehicles for transport was observed in more details. The automotive industry is a dominant sector and one of the main determinants of Slovak economy and a trade specialization in this commodity division was identified by the RSCA values. The outcomes show prerequisites of Slovakia for maintaining its comparative advantages in automobile manufacture however at the same time calls for a more diversified export structure in order to mitigate negative consequences resulting from a lower demand for products of the automotive sector.    

Keywords: Foreign trade, Comparative advantage, Specialization.


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CITATION: Abstracts & Proceedings of INTCESS 2019- 6th International Conference on Education and Social Sciences, 4-6 February 2019- Dubai, UAE

ISBN: 978-605-82433-5-4