COMPARATIVE ANALYSIS OF STRUCTURAL Σ-CONVERGENCE OF EXPORTS
COMPARATIVE ANALYSIS OF STRUCTURAL Σ-CONVERGENCE OF EXPORTS

Author(s): Vera Pirimova
Subject(s): Social Sciences, Economy
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Convergence; Divergence; Export structure; Export dissimilarity Index.
Summary/Abstract: The paper analyses the structural σ-convergence of exports of six CEE countries to the Euro area. The countries are Estonia, Latvia, Lithuania, Slovakia, and Slovenia, which are members of the Euro area, as well as Bulgaria, which was included in the ERM II currency mechanism on 10.07.2020. The main goals are to measure and compare the structural σ-convergence of exports of the six CEE countries and to prove whether the introduction of the common currency (the euro) has an impact on the convergence. The research consists of the theoretical and empirical parts. The theoretical part systematizes basic concepts of economic, trade, club, and structural convergence. One index method used by his authors to study economic convergence has been adapted to the structural σ-convergence of exports. This is the dissimilarity index of Von Hagen and Traistaru. In the empirical part, the values of the index, by commodity groups, according to SITС, Rev. 4, for the six countries during the period 2002-2018 are determined. The index is calculated also as aggregated, referring to the total exports of the selected countries and for the whole period. The results are presented in graphical form. Based on them, the structural and dynamic characteristics of the convergence and divergence of exports of the six countries compared to the exports of the Euro area are derived. Conclusions are made about achieved the different degree of similarity, that is uncertain and unstable and so the convergence can be only partially attributed to the adoption of the euro. Methods of analysis and synthesis, induction and deduction, methods of the empirical index, and comparative analysis are applied.

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