On the interdependence between specialization and structure of machinery exports: Case of European economies

The article dissects the intercourse between specialization and structure of exports of machinery and transport equipment in Europe in the latest years. In particular, the trends of increasing specialization of Poland, Czechia and Slovakia and decreasing specialization of Spain have been studied. The hypotheses stating that export specialization in machinery and equipment depends on a stable export basket and diversifying geography of export have been empirically tested. The methodology applied was based on the exports’ decomposition onto intensive and extensive products and geographical margins, as well as calculation of revealed comparative advantage and trade intensity indices. It has been revealed that during initial increase in specialization Czechia and Slovakia actively diversified geography and formed sustained product structure of their exports, then resorting to exports of established products to traditional importers. Unlike Czechia and Slovakia, the increase and the following decrease in specialization of Poland were accompanied with volatile export basket and stable geography of supplies. The decrease in specialization of Spain developed amidst unstable product and geographical structure of exports. Hence, the first hypothesis has been proved for Poland, Czechia and Slovakia; the second one stays valid only for the initial growth of specialization of Czechia and Slovakia. It is suggested that the following research might be devoted to studying whether sluggish dynamics of Poland, as well as its incapacity to compete internationally in machinery and equipment, are caused by endogenous economic factors, such as lower productivity and lesser FDI inflow.