Growth and structural changes in the international trade in Czech manufacturing industries in 1993-97

The growth of the Czech economy in 1993-97 was impeded by an insufficient r esponse of domestic supply to 1) sharply rising domestic aggregate demand a nd 2) opportunities offered by the widening foreign demand for Czech export s. The authors examine and reject the hypothesis that there was a deepening in the industrial specialization of production and exports. They observed no tendency towards higher concentration, use of market power, or increasin g economies of scale. And while there was a growth in intra-industrial spec ialization of trade, that growth was lowest in industries with technologica lly advanced products. Exports of physical capital-intensive commodities we akened, while exports of commodities with high added value of labor and hum an capital gained strength. Firms with foreign direct investment became the most dynamic sector of the Czech economy, and there are signs that their g rowth will continue.