Does Trade Facilitation Promote Export Technological Sophistication? Evidence From the European Transition Countries

Abstract

In this paper, we examine the impact of trade facilitation on the export technological sophistication from the European transition economies over 2004 to 2020. It is found that, in terms of trend, the export technological sophistication of labor-intensive and traditional resource-intensive industries is primarily concentrated in a lower range. In contrast, the export technological sophistication of capital and technology-intensive industries is generally low. Trade facilitation in each country shows a slow upward trend. The regression results show that trade facilitation significantly impacts the export technological sophistication of transition economies in general. In terms of heterogeneity, the impact is significant only in the Baltics economies, upper-middle-income and above countries, and to varying degrees in all types of light and heavy industries, differentiated industries, and technology-type industries. The mechanism analysis shows that the “reconfiguration” effect, “pushback” effect, and “spillover” effect are virtual channels through which trade facilitation affects the export technological sophistication.