Does variety matter? Export pattern of Poland prior and after accession to the EU
Does variety matter? Export pattern of Poland prior and after accession to the EU

Summary/Abstract: The goal of this article is to investigate the role of product variety and changes in product variety in the pattern of exports of Poland a middle-sized open economy in the second phase of economic transition to a benchmark group of EU15 Member States in the period preceding and following the EU accession. Accession can be considered as an exogenous shock to economic system leading to necessary adjustments in trade relations between countries. We purposefully do not take into account the years affected by global financial crisis. The analysis covers the period 1999-2006 and is carried out on highly disaggregated trade and sectoral data. In the analysis we utilize both simple product count approach as well as more complex index of relative variety of products. Attention is given to the scope and structure of intra-industry trade. The overall product variety in exports to EU15 as measured by simple product counts is found to have decreased while relative product variety in comparison to EU15 Member States remained at roughly unchanged level. Furthermore we investigate the link between the changes in export variety and the growth of TFP in Polish manufacturing industry sectors. The conclusions are drawn from dynamic panel data model controlling for several features suggested by the literature of the subject.

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