Evaluation of International Competitiveness Using the Revealed Comparative Advantage Indices: The Case of the Baltic States

Abstract

As an international trade becomes crucial in the growing economies, the research measuring the international trade with competitiveness are quite limited, especially for the Baltic States. The main aim of the article is to evaluate the international competitiveness using the revealed comparative advantage indices in the Baltic States: Lithuania, Latvia, and Estonia. Three different revealed comparative advantage indices were used for analysis of import and export figures for several industry sectors of the Baltic States over the period of 1998-2012. The analysis showed that the Baltic States may lose their competitiveness due to the globalization effects and increasing competition from other emerging economies. However, the enhancement of the international competitiveness of Lithuania, Latvia, and Estonia depends on their ability to implement the reforms in the public sector; to improve the business and investment conditions; to increase the flexibility and efficiency in the labour market.

DOI: 10.5901/mjss.2014.v5n13p353