Four essays on international trade and location of production in transition countries
The thesis is composed of four broadly related essays. The focus is on Central and Eastern
European Countries (CEECs), on their production structures and integration with
The first two chapters look at how market liberalisation and opening of the
economy shaped the structure and location of economic activity. The fITst chapter studies
the spatial distribution of industrial activity in the CEECs since the beginning of transition.
Our analysis shows that the detenninants of industrial location in the CEECs are similar to
those typical for the EU. The increasing returns to scale industries tend to concentrate in
central locations, industries benefit from proximity to industrial consumers (backward
linkages) and countries rich in scientists and engineers attract R&D intensive industries.
The second chapter analyses the location of economic activity across regions in Poland.
The Polish data provides support not only for backward linkages, but also for forward
linkages hypothesis, as industries' growth is higher in regions where large concentrations of
finns' suppliers are present.
In the third and fourth chapters the focus shifts towards the future. The third chapter
studies the effects on Poland of the adoption of the EU's Common External Tariff (CET).
The analysis indicates that overall impact of the adoption of the CET on Polish imports is
modest. In the fourth chapter I employ a computable general equilibrium model to evaluate
the impact of the EU accession on Poland, Hungary and the EU-IS. I study the implications
of integration into the customs union, adoption of the EU standards and removal of internal
borders. The simulations indicate significant welfare gains for Poland and Hungary and
modest gains for the EU. The new members are expected to experience production
increases across almost all sectors, while the impact on EU production is some sectors is
negative, but very small