Terms of Trade and Efficiency of External Transactions in Romania

Abstract

This article addresses the aspects related to the efficiency of the Romania’s external trade in goods, from the terms of trade perspective. Through the analytical approach, starting from aggregate evolution to the detailed level of products, we attempted to capture the impact of the EU enlargement and the global financial crisis on the efficiency of international trade in Romania during 2006-2016. Structure of external trade and trade balance are factors which influence the terms of trade. Therefore, in our analytical approach we evaluated the efficiency of some product groups, defining efficiency intervals, in correlation with the evolution of theirs shares in export / import, respectively trade balances during the analyzed period. The competitiveness of external trade depends on the level and dynamics of export and import prices, in close connection with embedded product technologies. The use of 3-digit SITC product technology classification is particularly relevant in the context of the topic. A special attention was paid to the territorial distribution, at NUTS3 level, of the products exports with effective impact on Romania’s trade efficiency.

Keywords

• terms of trade
• trade balance
• trade efficiency
• export