REGIONAL COOPERATION AND ECONOMIC INTEGRATION

PART II:
diversified structure as considered to be fairly understandable if taken into account the size
of the country and trade liberalization process (Figure 6). Special emphasis here should be
placed on the import structure consisted of high value added manufactures (equipment), as
well as the oil products and energy which price is quite changeable on the world markets.
Figure 7: Share of manufacturing exports (average 2000-2008)
Share of the sector in European manufacturing exports
Macedonia’s market share in manufacturing products
Source: UN Comtrade and own estimates
As regards the export markets, noteworthy is to mention that few trading partners (mostly
EU and western Balkan counties) receive almost 95% of the total exports, unlike the imports
that exhibit no structural change within the period into consideration. Further analysis made
about the Macedonian manufacturing exports suggest that the loss of competitiveness and
the market share is to be a reflection of the strong export concentration and the patterns
of specialization. We have therefore examined the development of market share of the ten
two-digit sectors accounting for 90% of total Macedonian manufacturing exports (Figure
7). Subsequently, we have made a comparison with the share of the particular sectors into
the European manufacturing exports as the largest trading partner. The evidence obtained
suggests that Macedonian exports have increased in most of the sectors the country is
being specialized and export concentrated. These sectors, notwithstanding, are those with
decreasing share into the European manufacturing exports. The analysis, principally,
points toward the weaker near – term export growth prospects, although the latest FDI was
supposed to diversify exports.
3. Modeling the determinants of exports and imports so as to better assess the
competitive performances of the Macedonian economy
Trade equations are usually interpreted as for the time series behavior of the
appropriate exports and imports quantities and prices. There is no single answer among the
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