Trade and Industrial Upgrading in Countries of Central and Eastern Europe: Patterns of Scale- and Scope-Based Learning

Abstract

This paper explores mechanisms linking trade and restructuring in Central and Eastern European (CEE) countries through learning and industrial upgrading. These are reflected in changes in the composition of trade through changes in the relative shares of particular products and clusters in exports (scale), and in the number of products exported (scope). An analysis of export clusters shows the decreasing importance of commodities (homogeneous resource-based goods) and a shift toward technology and labor-intensive products to be a common trend. However, differences between the countries are strong with respect to changes in both scale and scope in technology and labor-intensive activities. These differences show that trade-based learning mechanisms have strong effects on differences in industrial upgrading between CEE economies.

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