Economic Integration and Similarity in Trade Structures

In this paper, we look at the similarity of the trade structures toward the EU market between four CEECs and the EU15. We evaluate the appropriateness of different indices to compare export flows—correlation indices and distance metrics—opting for the use of the Bray-Curtis semi- metric. We examine both how the export composition of a country has changed over time and how the export composition has changed with respect to the EU15 export composition. Finally, we test if the dynamics of sectoral distribution of the CEECs’ exports is related to the role acquired by processed trade in the 1990s. We give evidence that processed trade is crucial in explaining changes in the overall structure of exports of transition countries, and that greater economic integration in terms of trade flows and processing trade does not always lead to greater export similarity