Patterns of structural changes in CEE economies in new millennium
Abstract
In the era of intensive globalization and frequent economic shocks, boosting the GDP growth becomes the most difficult task and main preoccupation of policymakers. This is particularly true for Central Eastern European countries or so called CEE countries, which are trying to overcome contemporary and inherited imbalances at the same time. These economies were faced with another huge challenge after 2008. They have to maintain the same pace of structural reforms during the global economic crisis and to mitigate the negative effects of the crisis on economic growth. In that sense, the aim of this paper is to provide insight into a structural change in these economies in the period 2000–2014, using Leontief input-output analysis of the key sectors. The results pointed out that most of the key sectors during the period are service related sectors and that their number is increased after the crisis, while manufacturing of basic metals and electricity, gas, steam, and air conditioning supply have lost the status of the key sector.
Keyword : structural change, input-output model, key sectors, crisis, CEE economies
How to Cite
Fedajev, A., Nikolic, D., Radulescu, M., & Ileana Sinisi, C. (2019). Patterns of structural changes in CEE economies in new millennium. Technological and Economic Development of Economy, 25(6), 1336-1362. https://doi.org/10.3846/tede.2019.11253
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Gurgul, H., & Lach, L. (2015). Key sectors in the post-communist CEE economies: What does the transition data say? Communist and Post-Communist Studies, 48(1), 15-32. https://doi.org/10.1016/j.postcomstud.2014.12.001
Hewings, G. (1982). The empirical identification of key sectors in an economy: A regional perspective. The Developing Economies, 2(2), 173-195. https://doi.org/10.1111/j.1746-1049.1982.tb00444.x
Igan, D., & Suzuki, J. (2012). The “Wal-Mart effect” in Central and Eastern Europe. Journal of Comparative Economics, 40(2), 194-210. https://doi.org/10.1016/j.jce.2011.08.003
Jambor, A., & Hubbard, L. (2013). Changing product structure and comparative advantage: The Case of Hungarian agri-food trade. Ekonomický časopis, 61(8), 846-860. Retrieved from http://ekonom.sav.sk/en/casopis/rocnik/8-2013
Karagiannis, G., & Tzouvelekas, V. (2010). Sectoral linkages and industrial efficiency: a dilemma or a requisition in identifying development priorities? Annals of Regional Science, 45, 207-233. https://doi.org/10.1007/s00168-008-0280-5
Landesmann, M. A., & Stöllinger, R. (2019). Structural change, trade and global production networks: An ‘appropriate industrial policy’ for peripheral and catching-up economies. Structural Change and Economic Dynamics, 48, 7-23. https://doi.org/10.1016/j.strueco.2018.04.001
Luptáčik, M., & Böhm, B. (2010). Efficiency analysis of a multisectoral economic system. Central European Journal of Operations Research, 18(4), 609-619. https://doi.org/10.1007/s10100-010-0175-2
Mack, E. (2014). Broadband and knowledge intensive firm clusters: Essential link or auxiliary connection? Papers in Regional Science, 93(1), 3-29. https://doi.org/10.1111/j.1435-5957.2012.00461.x
Maré, D. C., Fabling, R., & Stillman, S. (2014). Innovation and the local workforce. Papers in Regional Science, 93(1), 183-201. https://doi.org/10.1111/j.1435-5957.2012.00479.x
Mattioli, G., & Lamonica, R. (2013). The ICT role in the world economy: An input-output analysis. Journal of World Economic Research, 2(2), 20-25. https://doi.org/10.11648/j.jwer.20130202.11
Medve-Bálint, G. (2014). The role of the EU in shaping FDI flows to East Central Europe. Journal of Common Market Studies, 52(1), 1153-1182. https://doi.org/10.1111/jcms.12077
Miller, R. E., & Blair, P. (2009). Input output analysis. Foundations and extensions. Cambridge, UK: Cambridge University Press. https://doi.org/10.1017/CBO9780511626982
Olczyk, M., & Kordalska, A. (2018). Growth and structural changes in transition countries: the chicken or the egg? Journal of Business Economics and Management, 19(3), 544-565. https://doi.org/10.3846/jbem.2018.6580
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Podkaminer, L. (2013). Lessons from country experiences: Alternative policy paradigms with regard to EU accession/EU membership and cohesion policies (Grincoh Working Paper 1, Task 1, P1. 3). The Vienna Institute for International Economic Studies, Vienna, Austria. Retrieved from http://www.grincoh.eu/working-papers
Raiser, M., Schaffer, M., & Schuchhardt, J. (2004). Benchmarking structural change in transition. Structural Change and Economic Dynamics, 15(1), 47-81. https://doi.org/10.1016/S0954-349X(03)00027-4
Rasmussen, N P. (1956). Studies in inter-sectoral relations. Amsterdam: NorthHoland.
Rodrik, D. (2009). Industrial policy; Don’t ask why. Ask how. Middle East Development Journal, 1(1), 1-29. https://doi.org/10.1142/S1793812009000024
Škuflić, L., & Družić, M. (2016). Deindustrialisation and productivity in the EU. Economic Research, 29(1), 991-1002. https://doi.org/10.1080/1331677X.2016.1235505
Soulsby, A., Hollinshead, G., & Steger, T. (2017). Crisis and change in industrial relations in Central and Eastern Europe. European Journal of Industrial Relations, 23(1), 5-15. https://doi.org/10.1177/0959680117693686
Stojčić, N., & Aralica, Z. (2017). Choosing right from wrong: Industrial policy and (de)industrialization in Central and Eastern Europe (EIZ Working Papers, No. 1703). The Institute of Economics, Zagreb, Croatia. Retrieved from https://hrcak.srce.hr/index.php?id_clanak_jezik=272875&show=clanak
ten Raa, T. (2005). The economics of input-output analysis. Cambridge: Cambridge University Press. https://doi.org/10.1017/CBO9780511610783
Temurshoev, U., & Oosterhaven, J. (2014). Analytical and empirical comparison of policy-relevant key sector measures. Spatial Economic Analysis, 9(3), 284-308. https://doi.org/10.1080/17421772.2014.930168
Török, A., & Jambor, A. (2013). Agri-food trade of the new member states since the EU accession. Agriculture Economic – Czech, 59(3), 101-112. https://doi.org/10.17221/110/2012-AGRICECON
Tregenna, F. (2008). Sectoral engines of growth in South Africa: An analysis of services and manufacturing (Research Paper / UNU-WIDER, No. 2008.98). Retrieved from https://www.econstor.eu/bitstream/10419/45157/1/589760823.pdf
Van Neuss, L. (2018). Globalization and deindustrialization in advanced countries. Structural Change and Economic Dynamics, 45, 49-63. https://doi.org/10.1016/j.strueco.2018.02.002
World Input Output Data (WIOD) – Release 2016. (n.d.). Retrieved from http://www.wiod.org/home
Araujo, R. A. & Trigg, A. B. (2015). A neo-Kaldorian approach to structural economic dynamics. Structural Change & Economic Dynamics, 33, 25-36. https://doi.org/10.1016/j.strueco.2015.02.002
Archibugi, D. & Filippetti, A. (2011). Is the economic crisis impairing convergence in innovation performance across Europe? Journal of Common Market Studies, 49(6), 1153-1182. https://doi.org/10.1111/j.1468-5965.2011.02191.x
Belloc, M., & Tilli, R. (2013). Unemployment by gender and gender catching-up: Empirical evidence from the Italian regions. Papers in Regional Science, 92(3), 481-494. https://doi.org/10.1111/j.1435-5957.2012.00427.x
Berglöf, E., & Roland, G. (1997). The EU as an “Outside Anchor” for transition reforms. (SITE Working Paper Series 132). Stockholm School of Economics, Stockholm, Sweden.
Bohle, D., & Greskovits, B. (2012). Capitalist diversity on Europe’s Periphery. NY: Cornell University Press.
Botric, V. (2013). Identifying key sectors in Croatian economy based on input-output tables (Working Paper 1302). Economic Institute Zagreb, Zagreb, Croatia. https://doi.org/10.2139/ssrn.2553763
Cantore, N., Clara, M., Lavopa, A., & Soare, C. (2017). Manufacturing as an engine of growth: Which is the best fuel? Structural Change and Economic Dynamics, 42, 56-66. https://doi.org/10.1016/j.strueco.2017.04.004
Capello, R., & Caragliu, A. (2015). After crisis scenarios for CEECs: Alternative evolutions of structural adjustments. Cambridge Journal of Regions Economy and Society, 9(1), 81-101. https://doi.org/10.1093/cjres/rsv023
Capello, R., & Perucca, G. (2015). Openness to globalization and regional growth patterns in CEE countries: from the EU accession to the economic crisis. Journal of Common Market Studies, 53(2), 218-236. https://doi.org/10.1111/jcms.12157
Cardente, M. A., Llanes, C. J., Lima, M. C., & Morilla C. R. (2008). Detection of key sectors by using social accounting matrices: an alternative approach. Journal of Applied Input-Output Analysis, 1314, 1-9.
Cerovic, B., Nojkovic, A., & Uvalic, M. (2014). Growth and industrial policy during the transition. Economic Annals, 59(201), 7-34. https://doi.org/10.2298/EKA1401007C
Chilimoniuk-Przeździecka, E. (2011). Offshoring in business services sector over the business cycle: A case of growth of the international cooperation. Folia Oeconomica Stetinensia, 10(1), 7-19. https://doi.org/10.2478/v10031-011-0005-2
Cmiel, A., & Gurgul, H. (2002). Application of maximum entropy principle in key sector analysis. Systems Analysis Modelling Simulation, 42(9), 1361-1376. https://doi.org/10.1080/716067215
De Groot, H. L. F. (1998). The determination and development of sectoral structure. (Tilburg University Discussion Paper 1998-125). Center for Economic Research Tilburg, Netherlands. Retrieved from https://pdfs.semanticscholar.org/e144/db8b534d49eb3d387b902ceeabff7c0c1c64.pdf
Dobrinsky, R., & Havlik, P. (2013). Economic convergence and structural change: the role of transition and EU accession (wiiw Research report 395). The Vienna Institute for International Economic Studies, Viena, Austria. Retrieved from https://wiiw.ac.at/economic-convergence-and-structuralchange-the-role-of-transition-and-euaccession-dlp-3357.pdf
European Commission. (2014). Communication from the commission to the European Parliament, the council, the European economic and social committee and the committee of the regions for a European industrial renaissance. Retrieved from http://ec.europa.eu/environment/circular-economy/pdf/circular-economy-communication.pdf
Fertő, I. (2016). Structural transformation in Central and Eastern European countries’ agriculture:
Convergence or divergence? Advances in Economics and Business, 4(10), 547-552. https://doi.org/10.13189/aeb.2016.041004
Gál, Z. (2014). Relocation of business services into Central and Eastern Europe (evidence from trade and location statistics). Romanian Review of Regional Studies, 10(1), 67-78. Retrieved from http://rrrs.reviste.ubbcluj.ro/arhive/Artpdf/v10n12014/RRRS10120148.pdf
Górska, R. (2015). 15-03 Backward and forward linkages based on an input-output analysis–comparative study of Poland and selected European countries. Applied Econometric Papers. Retrieved from http://kolegia.sgh.waw.pl/pl/KAE/struktura/IE/struktura/ZES/Documents/Working_Papers/aep15-03.pdf
Gurgul, H., & Lach, L. (2015). Key sectors in the post-communist CEE economies: What does the transition data say? Communist and Post-Communist Studies, 48(1), 15-32. https://doi.org/10.1016/j.postcomstud.2014.12.001
Hewings, G. (1982). The empirical identification of key sectors in an economy: A regional perspective. The Developing Economies, 2(2), 173-195. https://doi.org/10.1111/j.1746-1049.1982.tb00444.x
Igan, D., & Suzuki, J. (2012). The “Wal-Mart effect” in Central and Eastern Europe. Journal of Comparative Economics, 40(2), 194-210. https://doi.org/10.1016/j.jce.2011.08.003
Jambor, A., & Hubbard, L. (2013). Changing product structure and comparative advantage: The Case of Hungarian agri-food trade. Ekonomický časopis, 61(8), 846-860. Retrieved from http://ekonom.sav.sk/en/casopis/rocnik/8-2013
Karagiannis, G., & Tzouvelekas, V. (2010). Sectoral linkages and industrial efficiency: a dilemma or a requisition in identifying development priorities? Annals of Regional Science, 45, 207-233. https://doi.org/10.1007/s00168-008-0280-5
Landesmann, M. A., & Stöllinger, R. (2019). Structural change, trade and global production networks: An ‘appropriate industrial policy’ for peripheral and catching-up economies. Structural Change and Economic Dynamics, 48, 7-23. https://doi.org/10.1016/j.strueco.2018.04.001
Luptáčik, M., & Böhm, B. (2010). Efficiency analysis of a multisectoral economic system. Central European Journal of Operations Research, 18(4), 609-619. https://doi.org/10.1007/s10100-010-0175-2
Mack, E. (2014). Broadband and knowledge intensive firm clusters: Essential link or auxiliary connection? Papers in Regional Science, 93(1), 3-29. https://doi.org/10.1111/j.1435-5957.2012.00461.x
Maré, D. C., Fabling, R., & Stillman, S. (2014). Innovation and the local workforce. Papers in Regional Science, 93(1), 183-201. https://doi.org/10.1111/j.1435-5957.2012.00479.x
Mattioli, G., & Lamonica, R. (2013). The ICT role in the world economy: An input-output analysis. Journal of World Economic Research, 2(2), 20-25. https://doi.org/10.11648/j.jwer.20130202.11
Medve-Bálint, G. (2014). The role of the EU in shaping FDI flows to East Central Europe. Journal of Common Market Studies, 52(1), 1153-1182. https://doi.org/10.1111/jcms.12077
Miller, R. E., & Blair, P. (2009). Input output analysis. Foundations and extensions. Cambridge, UK: Cambridge University Press. https://doi.org/10.1017/CBO9780511626982
Olczyk, M., & Kordalska, A. (2018). Growth and structural changes in transition countries: the chicken or the egg? Journal of Business Economics and Management, 19(3), 544-565. https://doi.org/10.3846/jbem.2018.6580
Piton, S. (2017). Economic integration and the non-tradable sector: the European Experience. Paper presented at 25th CEPR European Summer Symposium in International Macroeconomics (ESSIM), London, UK.
Podkaminer, L. (2013). Lessons from country experiences: Alternative policy paradigms with regard to EU accession/EU membership and cohesion policies (Grincoh Working Paper 1, Task 1, P1. 3). The Vienna Institute for International Economic Studies, Vienna, Austria. Retrieved from http://www.grincoh.eu/working-papers
Raiser, M., Schaffer, M., & Schuchhardt, J. (2004). Benchmarking structural change in transition. Structural Change and Economic Dynamics, 15(1), 47-81. https://doi.org/10.1016/S0954-349X(03)00027-4
Rasmussen, N P. (1956). Studies in inter-sectoral relations. Amsterdam: NorthHoland.
Rodrik, D. (2009). Industrial policy; Don’t ask why. Ask how. Middle East Development Journal, 1(1), 1-29. https://doi.org/10.1142/S1793812009000024
Škuflić, L., & Družić, M. (2016). Deindustrialisation and productivity in the EU. Economic Research, 29(1), 991-1002. https://doi.org/10.1080/1331677X.2016.1235505
Soulsby, A., Hollinshead, G., & Steger, T. (2017). Crisis and change in industrial relations in Central and Eastern Europe. European Journal of Industrial Relations, 23(1), 5-15. https://doi.org/10.1177/0959680117693686
Stojčić, N., & Aralica, Z. (2017). Choosing right from wrong: Industrial policy and (de)industrialization in Central and Eastern Europe (EIZ Working Papers, No. 1703). The Institute of Economics, Zagreb, Croatia. Retrieved from https://hrcak.srce.hr/index.php?id_clanak_jezik=272875&show=clanak
ten Raa, T. (2005). The economics of input-output analysis. Cambridge: Cambridge University Press. https://doi.org/10.1017/CBO9780511610783
Temurshoev, U., & Oosterhaven, J. (2014). Analytical and empirical comparison of policy-relevant key sector measures. Spatial Economic Analysis, 9(3), 284-308. https://doi.org/10.1080/17421772.2014.930168
Török, A., & Jambor, A. (2013). Agri-food trade of the new member states since the EU accession. Agriculture Economic – Czech, 59(3), 101-112. https://doi.org/10.17221/110/2012-AGRICECON
Tregenna, F. (2008). Sectoral engines of growth in South Africa: An analysis of services and manufacturing (Research Paper / UNU-WIDER, No. 2008.98). Retrieved from https://www.econstor.eu/bitstream/10419/45157/1/589760823.pdf
Van Neuss, L. (2018). Globalization and deindustrialization in advanced countries. Structural Change and Economic Dynamics, 45, 49-63. https://doi.org/10.1016/j.strueco.2018.02.002
World Input Output Data (WIOD) – Release 2016. (n.d.). Retrieved from http://www.wiod.org/home