Document Type

Article

Publication Date

3-2018

Publication Title

Journal of Comparative Economics

Volume

46

Issue

1

Pages

78-93

Abstract

We analyze the role of the new goods margin in the Baltic countries’ exports and imports growth during the 1995–2008 period. Using the methodology developed in Kehoe and Ruhl (2013), we define the set of least-traded goods as those that account for the lowest 10% of total exports and imports in 1995, and then trace its growth in several markets including the Baltics’ main trade partners, the European Union and Russia. We find that, on average, by 2008 least-traded goods accounted for nearly 50% of total Baltic exports to their main trade partners. Moreover, we find that increases in the share of least-traded exports coincided with the timing of the trade liberalization reforms implemented by the Baltic countries. Least-traded imports also grew at robust rates, but their growth was lower than that of exports, accounting for slightly less than a quarter of total imports, that is, about half of the exports value. Moreover, we find that the shares of least-traded imports from the EU 15 and from Russia started diverging around the time the Baltic countries joined the EU, with the EU 15 share increasing and the Russian one declining. We also find that the Baltics’ share of least-traded exports outpaced that of other economies in Central and Eastern Europe. Finally, exports of new goods from the Baltic countries suffered noticeably during the Global Financial Crisis. After the crisis ended, the restart in new goods exports growth displayed mixed patterns.

Comments

Author Posting. © Association for Comparative Economic Studies 2018. This article is posted here by permission of the ACES for personal use, not for redistribution. The article was published in the Journal of Comparative Economics, 2018, https://doi.org/10.1016/j.jce.2017.01.001.

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This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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