The Impact of Trade Integration with the EU on Porductivity in a Post-Transition Economy. The Case of Polish Manufacturing Sectors

This paper addresses the relationship between growth of relative productivity in Polish manufacturing sectors and forces stemming from trade integration with the EU. We look at the productivity growth from the perspective of relations between Polish manufacturing sectors and the foreign ones, focusing on partner countries from the enlarged EU. Empirical analysis is based on sector level bilateral data concerning both domestic (Polish) and foreign markets’ characteristics and their degree of openness in the period 1995-2006. Main results indicate that, both in the short and long run, an increase in domestic sectors’ openness exerts a positive effect on productivity growth in Poland (the opposite effect is exhibited by foreign sectors’ openness). In addition, expansion in relative size of Polish sectors versus foreign ones boosts domestic labour productivity growth.