The Competitiveness of the Visegrad Group Countries in the Global Economy and the EU*
Purpose: To analyse changes in the international competitiveness of the Visegrad Group (V4) countries, i.e., Poland, Czech Republic, Slovakia and Hungary, in the 2014-2024 period. Particular attention is drawn to the impact of two major external shocks, the COVID-19 pandemic and the war in Ukraine, on foreign trade structures, on the development of the comparative advantages found, and the intensity of intra-industry trade. Design/Methodology/Approach: The study uses a comparative analysis of macroeconomic data on foreign trade from the Eurostat and UNCTAD bases. The international competitiveness is evaluated by means of trade structure ratios following the LALL technological classification, Balassa’s revealed comparative advantages (RCA), and Grubel-Lloyd intra-industry trade (IIT) indexes. The analysis is applied to total trade, trade with the EU27, and with non-EU27 countries. Findings: The results of the research indicate, that the Visegrad Group countries have improved their competitive standing both in the European Union and in the global economy. They increased their share in global exports and imports in the period examined and continued the process of economic convergence with the EU. The V4 countries’ export competitiveness relied on medium-tech sectors, especially the automotive industry. The high IIT values reaffirm a profound integration of the V4 economies into the European and global trade links. In parallel, competitive advantages were strengthened in raw materials and medium-tech sectors and weakened in some high-tech sectors, particularly after 2020. The COVID-19 pandemic failed to undermine the competitiveness of V4 in a longer term. On the other hand, the war in Ukraine had more effect on the trade structures and comparative advantage of these economies. Practical Implications: The results suggest the maintenance of a long-term competitiveness in the V4 countries requires a transition from the advantages based mostly on labour costs to a development model based on innovation. More expenditure on research and development, the development of high-tech sectors, and improving the technological potential of the regional economies are necessary. Originality/Value: The paper’s value lies in an all-round analysis of the trade competitiveness of the V4 countries that also includes the changes of comparative advantages, trade and intra-industry trade structures at the time of two major economic and geopolitical crises: the COVID-19 pandemic and the war in Ukraine. The analysis has also demonstrated that the rising economic significance of the V4 countries was not balanced with a growing specialisation in high-tech sectors.