Wspólnotowy Serwis Informacyjny Badan i Rozwoju - CORDIS

Trade patterns and technology flows in Greece, Turkey, Hungary and Mexico

This part analyses changes in the long-term trade patterns (1970-95) of Mexico, Greece, Turkey and Hungary to assess their evolution of technological capabilities, and the potential role of Greece, Turkey and Hungary in European integration. The aim is to point out the structural changes that are likely to have significant consequences for these three countries in the division of industrial activity in Europe. We use a ‘structuralist-evolutionary’ approach to development, with a central role assigned to dynamic efficiency, technical infrastructure and an efficient process of generation and diffusion of technology.

A disaggregated analysis of the trade patterns of the four countries shows significant changes in the commodity composition of their trade as well as different patterns of evolution over time. Turkey had significant changes in its trade specialisation and composition up to the second half of the 1980s, mostly by expanding ‘traditional’ exports. In more recent years, however, a much less favourable trade performance has emerged, accompanied by stable trade specialisation and relatively stagnation in medium-high technology sectors.

Greece shows relatively poor trade performance and few structural changes over the period. Its trade specialisation remains traditional, dominated by exports of raw materials and labour-intensive goods.

Hungary has followed an intermediate course, changing and upgrading the composition of its trade in the first half of the 1990s, with significant progress recently in medium-high technology sectors. However, the results so far in terms of trade performance (export growth) have been disappointing.

Mexico differs from the other three countries by the unique evolution of its specialisation patterns over the period. It was dominated by external shocks, which led to different phases of domestic adjustment with regard to trade and industrial restructuring.

The general picture emerging from the analysis of trade patterns is not very positive for the three economies around the EU. The trade and production structures of Greece and Turkey remain backward, with only a slightly more positive structure for Hungary. In all three cases, comparative disadvantages continue to be concentrated in sectors with the highest technology content. These weaknesses may be a cause for concern in the context of their integration into the EU.

In order to improve their position in the European division of labour and create endogenous sources of technological accumulation, ‘supply side’ upgrading will have a vital role to play. A major role can also be played by technology transfer resulting from closer integration and links with major enterprises in the EU. Various channels have been used to strengthen these connections. Among these, the role of FDI as a source of restructuring and technological changes has been rather limited up to the mid-1990s, with the exception of Hungary in recent years. However, local skills, infrastructures and institutions have to be upgraded to benefit from high-value EU FDI.

Reported by

University of Oxford
St Giles 21
OX1 3LA Oxford
United Kingdom
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