The Economic Complexity of the Visegrád Countries and the Role of Trade with Germany

Variables	Definition	Data Source	Num. of Observation	Mean	Std. Dev.
ECI	Economic complexity index	Harvard MIT (2022)	76	1.2642	0.2606
GL_HT	GL-index with Germany for high-tech product clusters	Authors' calculations based on Trade Map (2021)	76	0.3097	0.0953
GL_MT	GL-index with Germany for mid-tech product clusters	as above	76	0.4728	0.0959
GL_LT	GL-index with Germany for low-tech product clusters	as above	76	0.4364	0.0609
VERTHQ_HT	Vertical trade/high quality with Germany for high-tech product clusters	as above	76	0.1180	0.0544
VERTHQ_MT	Vertical trade/high quality with Germany for mid-tech product clusters	as above	76	0.1655	0.0458
VERTHQ_LT	Vertical trade/high quality with Germany for low-tech product clusters	as above	76	0.1131	0.0302
Fdi	Foreign direct investment, net inflows (% of GDP)	World Bank	76	5.9880	12.9742
LogImport	Logarithm of share of intermediate and capital goods imports in total imports from Germany	Authors' calculations based on UN Comtrade (2022)	76	1.9255	0.0195
LogRD	Logarithm of gross domestic spending on R&D (% of GDP)	OECD	76	−0.0234	0.1756
LogResearcher	Logarithm of researchers per 1000 employed	as above	76	0.7239	0.1103

[i] Source: Authors' own calculations

The GL-index of V4 countries in trade with Germany in low-tech goods (2001–2019).
Source: Authors' own calculations based on Trade Map (2021).

The GL index of V4 countries in trade with Germany in mid-tech goods (2001–2019).
Source: Authors' own calculations based on Trade Map (2021).

The GL index of V4 countries in trade with Germany in high-tech goods (2001–2019)
Source: Authors' own calculations based on Trade Map (2021).

The GL-index of V4 countries in high-quality vertical trade with Germany in low-tech goods (2001–2019).
Source: Authors' own calculations based on Trade Map (2021).

The GL-index of V4 countries in high-quality vertical trade with Germany in mid-tech goods (2001–2019).
Source: Authors' own calculations based on Trade Map (2021).

The GL index of V4 countries in high-quality vertical trade with Germany in high-tech goods (2001–2019).
Source: Authors' own calculations based on Trade Map (2021).

Table 2

Unit root test results

CADF Unit Root Test
Variables	CIPS Statistics
Variables	Level	1st difference
ECI	−3.717^***	-
GL_HT	−2.758^*	-
GL_MT	−1.21	−3.724^***
GL_LT	−1.30	−4.126^***
LogImport	−2.886^**	-
LogRD	−2.34	−4.113^***
LogResearcher	−2.93^**	-
VERTHQ_HT	−3.062^**	-
Im-Pesaran-Shin Unit Root Test
Variables	Intercept	Intercept - Trend
Fdi	−4.23201^***	−4.08435^***
VERTHQ_MT	−2.00021^**	−2.20049^**
VERTHQ_LT	−1.36331	−0.64119
Δ VERTHQ_LT	−8.86728^***	−7.62207^***

[i] ^***, ^** and ^* refer to 1%, 5% and 10% significant levels, respectively. The critical values for CADF test are −3.15 (1%), −2.88 (5%) and −2.74 (10%).

Table 3

Parameter constancy test results

Coefficient	Model 2	Model 3
χ²	694.57	588.93
χ²	(0.000)	(0.000)

[i] The values in parentheses refer to p-values.

Table 4

Random coefficient regression model coefficients for Model 1

Country	Czechia		Hungary		Poland		Slovakia
GL_HT	−0.0704	(0.404)	0.1050	(0.563)	1.2351^***	(0.249)	1.289^***	(0.5005)
GL_MT	0.2208	(0.579)	0.0689	(0.512)	−1.4072	(1.283)	−0.279	(0.241)
GL_LT	1.3453	(1.066)	1.7504^*	(0.947)	0.1776	(0.794)	−0.511	(0.643)
FDI	−0.0087	(0.006)	0.0001	(0.0004)	0.0016	(0.0098)	0.009	(0.0064)
LogImport	−1.352^*	(0.694)	−1.251^*	(0.694)	−1.2075^*	(0.698)	−2.827^***	(0.673)
LogRD	0.6005	(0.454)	0.1768	(0.553)	1.228^**	(0.533)	−0.109	(0.287)
LogResearcher	0.841^***	(0.144)	1.1051^***	(0.183)	−0.4478^**	(0.215)	1.776^***	(0.307)

[i] ^***, ^** and ^* refer to 1%, 5%, and 10% significant levels, respectively. The values in parentheses correspond to standard errors.

Table 5

Random coefficient regression model coefficients for Model 2

	Czechia		Hungary		Poland		Slovakia
VERTHQ_HT	1.195^***	(0.331)	1.484^**	(0.649)	2.543^***	(0.599)	1.5311^***	(0.280)
VERTHQ_MT	0.065	(0.4008)	0.356	(0.766)	−1.695^**	(0.817)	−0.6512^***	(0.218)
VERTHQ_LT	−0.256	(0.395)	−0.114	(1.149)	−1.993^*	(1.153)	−0.819^***	(0.312)
FDI	−0.002	(0.004)	0.000	(0.0009)	−0.004	(0.0125)	−0.006	(0.003)
LogImport	−0.9514^**	(0.446)	−1.657^***	(0.494)	−1.291^***	(0.491)	−2.544^***	(0.468)
LogResearcher	0.4097^***	(0.135)	0.9209^***	(0.313)	0.300	(0.327)	1.708^***	(0.187)

[i] ^***, ^**, and ^* refer to 1%, 5%, and 10% significant levels, respectively. The values in parentheses correspond to standard errors.

Appendix A

Cross-section dependency test results

Variables	CDLM₁	CDLM₂	LM_adj
ECI	106.5706	27.87753	27.76642
ECI	(0.000)	(0.000)	(0.000)
GL_HT	19.33611	2.695103	2.583992
GL_HT	(0.003)	(0.007)	(0.009)
GL_MT	48.55743	11.13057	11.01946
GL_MT	(0.000)	(0.000)	(0.000)
GL_LT	34.05162	6.943106	6.831995
GL_LT	(0.000)	(0.000)	(0.000)
VERTHQ_HT	53.55607	12.57355	12.46244
VERTHQ_HT	(0.000)	(0.000)	(0.000)
VERTHQ_MT	10.1532	0.044226	−0.066885
VERTHQ_MT	(0.118)	(0.964)	(0.946)
VERTHQ_LT	14.61022	1.330855	1.219744
VERTHQ_LT	(0.024)	(0.183)	(0.223)
Fdi	14.56701	1.318381	1.20727
Fdi	(0.024)	(0.187)	(0.227)
LogImport	30.15403	5.817966	5.706855
LogImport	(0.000)	(0.000)	(0.000)
LogRD	92.42095	23.79288	23.68177
LogRD	(0.000)	(0.000)	(0.000)
LogResearcher	67.20774	16.51445	16.40334
LogResearcher	(0.000)	(0.000)	(0.000)

Appendix B

Correlation Matrices for Model 1 and Model 2

Model 1
	GL_HT	GL_MT	GL_LT	Fdi	LogImport	LogRD	LogResearcher
GL_HT	1	-	-	-	-	-	-
GL_MT	0.7746	1	-	-	-	-	-
GL_LT	0.7667	0.7999	1	-	-	-	-
Fdi	0.0161	−0.1464	−0.1509	1	-	-	-
LogImport	−0.3492	−0.2576	−0.1261	−0.0871	1	-	-
LogRD	0.7107	0.4893	0.5864	−0.0058	−0.175	1	-
LogResearcher	0.0862	0.0952	0.2062	−0.1306	−0.0371	0.418	1

Model 2
	VERTHQ_HT	VERTHQ_MT	VERTHQ_LT	Fdi	LogImport	LogRD	LogResearcher
VERTHQ_HT	1	-	-	-	-	-	-
VERTHQ_MT	0.5871	1	-	-	-	-	-
VERTHQ_LT	0.246	0.3713	1	-	-	-	-
Fdi	0.0903	−0.0051	−0.1073	1	-	-	-
LogImport	−0.2745	−0.0883	0.0355	−0.0871	1	-	-
LogRD	0.864	0.7417	0.3039	−0.0058	−0.175	1	-
LogResearcher	0.4123	0.3267	0.6274	−0.1306	−0.0371	0.418	1

Appendix C

Variance Inflation Factor

Model 1
GL_HT	1.18
GL_MT	1.23
GL_LT	1.18
Fdi	1.11
LogImport	1.3
LogRD	1.15
LogResearcher	1.07
Mean VIF	1.17

Model 2
VERTHQ_HT	1.82
VERTHQ_MT	1.6
VERTHQ_LT	1
Fdi	1.05
LogImport	1.1
LogResearcher	1.27
Mean VIF	1.31

References

Authors

Metrics

Articles in this issue

DOI: https://doi.org/10.2478/ceej-2022-0013 | Journal eISSN: 2543-6821 | Journal ISSN: 2544-9001

Journal RSS Feed

Language: English, German

Page range: 219 - 236

Published on: Oct 23, 2022

Published by: Faculty of Economic Sciences, University of Warsaw

In partnership with: Paradigm Publishing Services

Keywords:

JEL:

F14,

F43,

O11,

O14,

O57

Related subjects:

Business and economics,

Political economics,

Economic theory, systems and structures,

Microeconomics,

Macroeconomics,

Economic policy

© 2022 Semanur Soyyiğit, Bartosz Michalski, published by Faculty of Economic Sciences, University of Warsaw
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Volume 9 (2022): Issue 56 (January 2022)

The Economic Complexity of the Visegrád Countries and the Role of Trade with Germany

Figures & Tables

Table 1

Figure 1

Figure 2

Figure 3

Figure 4

Figure 5

Figure 6