Our approach concerns, in the context of the Association Agreement and accession to the EU, the industrial
pools, which, in general, are subject to free movement of customs duties between Romania and the EU.
Nevertheless, the trade between the two parties will surely face non/tariff trade barriers (NTB), more or less
significant, such as different technical standards, preferential public procurement, customs procedures, etc. These
non-tariff trade barriers, supposed not to be entirely removed (at least in the near future) cause the fragmentation of
markets and protect the domestic producers against foreign competition.
At the same time, we base our approach on the idea that the higher the coefficient of intra-industry trade between
countries (Grübel coefficient) is, the closer the development levels of those industries are and the higher the
complementarily level is.
Identification of sensitive sectors. The analysis of the competitiveness of the processing companies in based on
the concept of „sensitive sectors” defined of the sectors which are the most protected by NTB and the sectors
permitting that such barriers maintain considerable proce discrepancies between countries. It is worth underlining
that the term „sensitive” refers to sectors which are strongly affected by integration and positively or negatively
impacted.
Of course, all economic sectors, not only the sensitive ones, will be sooner or later, directly or indirectly, affected
by the growing European economic integration and will further require structural adaptation.
In our opinion „non-sensitive” sectors are to low NTB sectors. The sectors with moderate tariff barriers are
classified as „sensitive” or „non-sensitive” by market segmentation indicators, in corroboration of basic indicators
such as concentration degree and potential of scale economics.
To select the sensitive sectors, several studies, including EU studies, suggest several criteria such as level of nontariff
barriers, rate of import penetration, price dispersion among the number countries and potential of scale
economics. Still, they finally use the NTB level and price dispersion.
Evaluation of competitiveness. After identifying the sensible sectors, we proceed to the next analysis stage for
evaluating the advantages of the companies working in the above sectors on the basic of a set of empiric
performance indicators.
According to the basic principle of evaluation of sectoral competitiveness, the sectors with high performance by
the above factors are able to develop in the new, more competitive environment of the European Single Market. The
analysis of the competitiveness of the selected sectors requires three steps, as follows:
Step 1: The analysis of historical trends of performance is not detailed in this paper, because it has been
approached in many studies made by the Institute of Industrial Economy (see Bibliography) in the last ten years, but
the conclusions will be presented in this paper. Of course, the stress in laid on the last years, because of data
availability; the evolution prior to 1990 is less relevant as regards the market economy.
Step 2: The analysis of structural changes and export performance of Romanian processing companies represent
the second step. As the results are generally known, they will be considered within the methodology.
Further, we detail the analysis of static and dynamic performance, while the diagnosis elements specific to the
two steps of the methodology will considered for the assessment of the competitiveness of the national companies, in
order to identify possible ways to turn the competitive advantages to good account.
Performance indicators regard to rates of import coverage by export, inside and outside the EU, and two indices
of specialisation of export and production; the four indices – individually or combined – could revead the
comparative advantage of various processing industries, as well as their competitiveness level.
Step 3: Analysis of static and dynamic performance based on the levels of four indices and the evolution of three
of them between 1990-2005.
2.1. Estimations of the comparative advantage
Literature has recorded several attempts to estimate the comparative advantages at the sector, industry and
activity levels. Most of the estimates are based on the domestic cost indicator of the factors computed as a ratio of
the cost of capital and labor, on the one hand, to the value added at international prices, on the other hand. It reveals
that a level of the domestic cost of the factors under unity could be accepted as a proof of the existence of the
comparative advantages.
The attempts to estimate the comparative advantages have been integrated into the efforts to conceive sectoral
Our approach concerns, in the context of the Association Agreement and accession to the EU, the industrial
pools, which, in general, are subject to free movement of customs duties between Romania and the EU.
Nevertheless, the trade between the two parties will surely face non/tariff trade barriers (NTB), more or less
significant, such as different technical standards, preferential public procurement, customs procedures, etc. These
non-tariff trade barriers, supposed not to be entirely removed (at least in the near future) cause the fragmentation of
markets and protect the domestic producers against foreign competition.
At the same time, we base our approach on the idea that the higher the coefficient of intra-industry trade between
countries (Grübel coefficient) is, the closer the development levels of those industries are and the higher the
complementarily level is.
Identification of sensitive sectors. The analysis of the competitiveness of the processing companies in based on
the concept of „sensitive sectors” defined of the sectors which are the most protected by NTB and the sectors
permitting that such barriers maintain considerable proce discrepancies between countries. It is worth underlining
that the term „sensitive” refers to sectors which are strongly affected by integration and positively or negatively
impacted.
Of course, all economic sectors, not only the sensitive ones, will be sooner or later, directly or indirectly, affected
by the growing European economic integration and will further require structural adaptation.
In our opinion „non-sensitive” sectors are to low NTB sectors. The sectors with moderate tariff barriers are
classified as „sensitive” or „non-sensitive” by market segmentation indicators, in corroboration of basic indicators
such as concentration degree and potential of scale economics.
To select the sensitive sectors, several studies, including EU studies, suggest several criteria such as level of nontariff
barriers, rate of import penetration, price dispersion among the number countries and potential of scale
economics. Still, they finally use the NTB level and price dispersion.
Evaluation of competitiveness. After identifying the sensible sectors, we proceed to the next analysis stage for
evaluating the advantages of the companies working in the above sectors on the basic of a set of empiric
performance indicators.
According to the basic principle of evaluation of sectoral competitiveness, the sectors with high performance by
the above factors are able to develop in the new, more competitive environment of the European Single Market. The
analysis of the competitiveness of the selected sectors requires three steps, as follows:
Step 1: The analysis of historical trends of performance is not detailed in this paper, because it has been
approached in many studies made by the Institute of Industrial Economy (see Bibliography) in the last ten years, but
the conclusions will be presented in this paper. Of course, the stress in laid on the last years, because of data
availability; the evolution prior to 1990 is less relevant as regards the market economy.
Step 2: The analysis of structural changes and export performance of Romanian processing companies represent
the second step. As the results are generally known, they will be considered within the methodology.
Further, we detail the analysis of static and dynamic performance, while the diagnosis elements specific to the
two steps of the methodology will considered for the assessment of the competitiveness of the national companies, in
order to identify possible ways to turn the competitive advantages to good account.
Performance indicators regard to rates of import coverage by export, inside and outside the EU, and two indices
of specialisation of export and production; the four indices – individually or combined – could revead the
comparative advantage of various processing industries, as well as their competitiveness level.
Step 3: Analysis of static and dynamic performance based on the levels of four indices and the evolution of three
of them between 1990-2005.
2.1. Estimations of the comparative advantage
Literature has recorded several attempts to estimate the comparative advantages at the sector, industry and
activity levels. Most of the estimates are based on the domestic cost indicator of the factors computed as a ratio of
the cost of capital and labor, on the one hand, to the value added at international prices, on the other hand. It reveals
that a level of the domestic cost of the factors under unity could be accepted as a proof of the existence of the
comparative advantages.
The attempts to estimate the comparative advantages have been integrated into the efforts to conceive sectoral
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