Abstract:

This paper examines the determinants of non-price competitiveness using Bayesian model averaging. Over the past twenty years, the EU New Member States have experienced improvements in export performance. This development has been driven by gains of the non-price competitiveness. However, the causes and determinants of this growth have not been identified so far. Therefore, we construct an export price index that adjusts for changes in non-price factors based on Benkovskis and Worz (2012). In addition to the index, we analyse determinants of non-price competitiveness in 13 new EU member states between 2006-2016. It is evident that the most significant indicators are associated with education, credit GDP and foreign market size.