Original scientific paper
https://doi.org/10.1080/1331677X.2015.1043781
Determinants of manufacturing industry exports in European Union member states: a panel data analysis
Martina Basarac Sertić
orcid.org/0000-0003-4182-8405
Valentina Vučković
Blanka Škrabić Perić
Abstract
This paper aims to provide analysis on the determinants of export performance on the extensive data-set of the 27 European Union member states’ total manufacturing and high tech manufacturing industry. Hence, this paper adds to the existing empirical work by specifying an export performance equation not only as a function of income and price, as is traditionally done, but also industrial production and labour cost. For that purpose, dynamic panel data models are estimated by utilising the system GMM estimator for the period from 2000 to 2011. The obtained results indicate that both industrial production and domestic demand have a positive and statistically significant impact on total and high tech manufacturing exports. On the other hand, it is proven that foreign demand also has an impact on total manufacturing exports. Thus, the paper’s contribution is reflected in the acknowledgement that a stable
macroeconomic environment (contained in the significance of a dummy variable for the economic crisis in both models), boosting production capacity and domestic demand, is essential for better export performance and the competitiveness of the manufacturing industry in an increasingly competitive global economic climate.
Finally, from the perspective of policy-making, the paper concludes that recovery in the manufacturing industry could be the much needed push from crisis to economic development.
Keywords
manufacturing industry; exports; European Union; dynamic panel data analysis; economic crisis; competitiveness
Hrčak ID:
171525
URI
Publication date:
20.12.2015.
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