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Weinbrenner Timo Supervisor: Prof. Dr. Fert ő Imre

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Weinbrenner Timo Supervisor: Prof. Dr. Fert ő Imre

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  1. The Impact of the Eastern European Enlargement on the Prosperity of the Old Member States’ Agricultural Export SectorsA comparative assessment of the French, German and Italian agricultural export developments towards the new eastern member states and of their effects on the respective revealed comparative advantage positionsMaster thesis presentationat AFEPA summer school 2013 WeinbrennerTimo Supervisor: Prof. Dr. Fertő Imre

  2. Presentation Outline • Motivation of the study and research question • Research objectives and indicators • Analytical method • Descriptive and analytical results • Summary and Conclusion Weinbrenner Timo

  3. (1) Motivation and research question Motivation Literature shows that the Central and Eastern European Countries (CEECs) benefitted from their EU-accessions in the form of welfare gains, while the EU-enlargement implied a moderate welfare decrease for the old member states (OMS). The thesis singles the OMS’ agricultural sectors out and assesses the impact of the EU-enlargement on them specifically. EU-enlargement consequences Consequences for the business environment of the agricultural producers in the OMS: Research question What overall economic effect did the three changes in the business environment have on the OMS’ agricultural sectors? Weinbrenner Timo

  4. (2) Research Objectives and Indicators Weinbrenner Timo

  5. (2) Explanation of indicators; Lawrence and Krugman Indices Formulas: Lawrence Krugman Where and r represent the reporter’s share of product j in it’s exports towards a predefined trading partner i and towards the world at time t respectively and β is assumed to equal 0.5 Interpretation Weinbrenner Timo

  6. (2) Explanation of indicators; NRCA Index Interpretation: Weinbrenner Timo

  7. (3) Analytical Method to analyze the indicators Descriptive analysis 1 Time series regression model to test for structural breaks: Change in mean value after 2004 Change in trade growth rate after 2004 2 Wald test for joint probability: c(3) = 0; c(4) = 0 Panel Unit Root Test for Distributional Divergence: Panel Unit Root Tests are performed on the mean deviations of the export in value data from the OMS to the NMS. A confirmed Unit Root would indicate distributional divergence over the assessment period 3 Weinbrenner Timo

  8. Total agricultural exports from the OMS towards the CEEC country aggregate: Regression results: Weinbrenner Timo

  9. Proportion of the reporters’ world exports directed towards the CEEC region (export shares): Regression results: Weinbrenner Timo

  10. Trade pattern = the composition of the export flow of a reporting country Lawrence Krugman average annual change Distributional Divergence Annual Mean Deviations: Unit Root is accepted for France, Germany and Italy at 1% level Continuous adaptation; Difference apparent, but inconsistent Divergence in export flows confirmed Above-average transformation rate; No EU-enlargement effect detectable Chen categories as division key: Initial ranking of Chen categories systematically reinforced (in absolute and relative terms): Consumer-ready food Processed intermediate goods Raw commodities Horticultural products But: for Italy Horticultural products is the second most important category. Agri-exports towards the NMS, in million USD Weinbrenner Timo

  11. Reference country group is the OECD family NRCA evolvements from 1999 to 2011 Regression results, exemplarily for Germany: For France, Germany and Italy the c(3) and c(4) coefficients are significant and improving in nature (except FRA c(4)). But: the NRCA Index developments are not congruent with the export flow developments. Conclusion: EU-enlargement had a supportive effect on the NRCA Index Weinbrenner Timo

  12. Absolute trade increase 1 heterogeneous Relative trade increase 2 Relatively equal In concordance with the level of involvement in the CEECs’ sales markets: Effect on NRCA position 3 Decisive is the general involvements of the OMS in the sales markets of the NMS Weinbrenner Timo

  13. (5) Summary and Conclusion (i) EU-Enlargement effect on French, German and Italian agricultural sectors Positive effect proven for: Trade quantities towards NMS Export shares towards NMS Support of RCA position Trade creation Business Boost for OMS Weinbrenner Timo

  14. (5) Summary and Conclusion (ii) Other Revealments • The agricultural sectors of the OMS are internationally competitive. • OMS supply the NMS at different intensity levels (shares of total export). Germany has highest involvement, followed by Italy. France marginally active in NMS. • Export patterns continuously transformed and converged to world export pattern. • Transformation occurred with structural determination, in favor of highly processed products (while Italy as well is strong in horticulture). • Convergence indicates a process of maturing trade linkages. • Germany exhibits least Krugman-differences • NMS are heterogeneous sales markets for the OMS. Main trading partners: • Absolute quantities: Poland, Czech Republic and Hungary, new comer Romania. • Quantity per capita: Baltic states, Czech Republic, Slovenia and Slovakia. • Within the agribusiness, the food processing industry might be a major winner, since the greatest share of trade increases was achieved with consumer-ready food products. • NRCA Index improvements rely heavily on a small number of competitive products Weinbrenner Timo

  15. Thank You for Your Attention!! Weinbrenner Timo

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