Scholarly record

EVALUATION OF POLANDВ’S REVEALED COMPARATIVE ADVANTAGE IN INTERNATIONAL TRADE IN SERVICES

M. Kakol

Abstract

Background: Services create most of employment and value added in modern economies and via delivering key intermediate inputs to other sectors they enhance industrial performance and boost economic growth. The significance of international trade in services is systemically growing together with development of ICT technologies. Although Poland's share in global trade in services is rather small (1.01% in exports and 0.72% in imports in 2016) this sector is important for the Polish economy. In 2016, Poland's services exports amounted to 10,6% of its GDP. For many years, Poland has had a growing surplus both in international trade in services and that with the EU28. Poland's accession to the EU and functioning within the large single market opened new opportunities for Polish firms, especially those that compete mainly on the basis of cost advantages, like in services sector, to deepen and strengthen their export specialization. The aim of this study is to analyse Poland's comparative advantages and disadvantages in international services trade and to specify Poland's export specialization within this sector. Methods: The empirical analysis of Poland's competitive position in trade in services at the global and regional level was helpful in achieving this objective. There were used such economic indicators like: Balassa's Revealed Comparative Advantage index (RCA), Revealed symmetric comparative advantage index (RSCA), that were calculated for Poland vis-Г -vis the world and EU-28 services trade flows, as well as trade balance index (TBI) and shares of certain services sectors in total services trade. Due to scarce data the research period covers the years 2005-2016. Results and conclusions: The analysis disclosed that Poland had the highest comparative advantage, as "revealed" by observed trade patterns, in: manufacturing services on physical inputs owned by others, construction, personal, cultural, and recreational services, maintenance and repair services and transport (i.e. labour-intensive sectors) while the largest comparative disadvantage was recorded in: government services, charges for the use of intellectual property, financial services as well as insurance and pension services. In most competitive sectors, a comparative advantage is not large (with one exception, RCA is always below 2). Although Poland gradually increased comparative advantages in some high-tech knowledge intensive services, they have a small share in Polish exports and the results achieved in trade in these services are better compared to the world than the EU28. Unfortunately, such export specialisation pattern will not guarantee Poland a strong competitive position in global and EU markets in the long term.

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