Openness to trade and competitiveness of small transitional economies
DOI:
https://doi.org/10.7251/ACE1318317TKeywords:
openness to trade, import, export, competitiveness, small economiesAbstract
Impact of openness to trade on overall economic growth/development and competitiveness is highly debatable subject amongst the economists with still unclear conclusions. The question of openness is particularly important in the case of small countries which tend to be more open and which are „doomed” to greater openness. The subject of this paper is to analyze the relationship between openness to foreign trade and competitiveness on a sample of 23 small and transitional economies. The aim of the research is to discern what kind of relationship between these two variables exists, and to investigate whether there is a di?erence between the ratio of export and the ratio of import and competitiveness. The results of our study suggest that one of the key benefits of outward orientation is better competitiveness on a global scale, and that is extremely important to di?erentiate between ?ows of foreign trade (export and import) especially when analyzing the openness of small countries. It is also important to conclude that the concept of competitiveness for the small transitional economies analyzed in this paper is actually compatible with the initial concept of competitiveness which looks at the export performance of countries where higher share of exports of industrial goods, or goods in higher processing phase means greater competitiveness.
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