EXPORT DIVERSIFICATION AND ECONOMIC GROWTH IN EUROPEAN UNION MEMBER STATES

The main aim of the paper is to analyze the relationship between the export diversification and the economic growth in the European Union in the period 1995–2009. This article consists of two parts. The first part concerns the theoretical analysis of the relationships between the degree of exports diversification (concentration) and the economic growth taking into account main determinants of these relationships. The next section examines the relationship between the degree of exports concentration and the economic growth in European Union member countries using a vector autoregression model (VAR). There have been estimated elasticity coefficients of GDP per capita to changes in the exports concentration on the basis of impulse response functions. This was followed by the decomposition of GDP per capita in order to estimate the impact of changes in GDP per capita and the degree of exports concentration on the variability of GDP per capita in the EU.