European Trade Study Group conference (ETSG) edition:7 location:University College Dublin, Ireland date:8-10 September 2005
In this paper we study the impact of trade integration on the degree ofindustrial specialization in thirteen countries of Central and Eastern Eu-rope. The results show that trade integration leads to long-run industrialspecialization in these countries. In contrast, an earlier paper by Beine& Coulombe (2004) on industrial specialization in Canada ¯nds long rundiversi¯cation as a result of trade liberalization with the U.S. Given thatthe Central and East European countries are still in an earlier stage ofdevelopment than Canada, we interpret the di®erent results that we ob-tain as evidence that the relationship between trade liberalization andindustrial specialization is not a monotonic one, but can di®er along thedevelopment path.