Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/218900 
Year of Publication: 
2020
Series/Report no.: 
ifso working paper No. 6
Publisher: 
University of Duisburg-Essen, Institute for Socio-Economics (ifso), Duisburg
Abstract: 
By studying the factors underlying differences in trade performance across European economies, this paper derives six different 'trade models' for 22 EU-countries and explores their developmental and distributional dynamics. We first introduce a typology of trade models by clustering countries based on four key dimensions of trade performance: endowments, technological specialization, labour market characteristics and regulatory requirements. The resulting clusters comprise countries that base their export success on similar trade models. Our results indicate the existence of six different trade models: the 'primary goods model' (Latvia, Estonia), the "finance model" (Luxembourg), the "flexible labour market model" (UK), the "periphery model" (Greece, Portugal, Spain, Italy, France), the 'industrial workbench model' (Slovenia, Slovakia, Poland, Hungary, Czech Republic), and the 'high-tech model' (Sweden, Denmark, Netherlands, Belgium, Ireland, Finland, Germany and Austria). Subsequently, we comparatively analyse the economic development and trends in inequality across these trade models. We observe a shrinking wage share and increasing personal income inequality in most of the trade models. The "high-tech model" is an exceptional case, being characterised by a relatively stable economic development and an institutional setting that managed to counteract rising inequality.
Subjects: 
Trade policy
cluster analysis
European Union
growth models
trade models
JEL: 
F10
F16
F43
J3
J5
K2
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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