Estimation of Ukraine’s foreign trade structure in order to determine the areas of export potential

  • Received October 26, 2018;
    Accepted November 28, 2018;
    Published December 8, 2018
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  • Article Info
    Volume 14 2018, Issue #3, pp. 30-43
  • Cited by
    2 articles

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This work is licensed under a Creative Commons Attribution 4.0 International License

Now there is no single approach to the planning of normative indicators of the foreign trade structure and the optimization of foreign economic operations, including marketing mix, which consider the priorities of socio-economic development of the territories acting as the global market agents. The work proposes an expanded method for using the Grubel-Lloyd and Horvath indices when assessing the level of inter-industry trade, which will determine the priority fields of international cooperation in the process of developing a foreign economic strategy both at the state level and for an individual company interested in expanding the geography of trade in the global market via finding new partners and using non-discriminating marketing methods.
The article reveals the existing trends in foreign trade of Ukraine that predispose current economic policy and foster the initiation of a new exporting strategy. Namely, the volume of total external debt exceeded GDP in 2014–2016; although a significant reduction of this ratio has been observed since 2017 due to the GDP shortening. Unfavorable trends were supplemented by the negative total balance of trade in goods and services in 2014–2018, with redistributing geographical structure in favor of the EU instead of the CIS countries (however, the exports in services, measured by absolute income, exceeded imports). The Grubel-Lloyd and Horvath indices, calculated for the recent trade data, proved a high level of diversification of Ukraine’s foreign economic activity, with significant intra-industry trade, but the scores of the Grubel-Lloyd index did not coincide by the geographical and commodity structure for the prevailing majority of countries. Nevertheless, new potential exporting destinations may be found, precisely because of the detected imbalances.

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    • Figure 1. Dynamics of external debt and GDP of Ukraine
    • Figure 2. The Grubel-Lloyd index for the countries with the largest foreign trade turnover (in relation to Ukraine), 2017–2018
    • Table 1. Quantitative characteristics of foreign trade
    • Table 2. Country groupings by the Grubel-Lloyd index (geographical dimension)
    • Tables 3. Commodity groups with the largest share of imports into Ukraine in 2017
    • Table 4. Products with the largest share of exports from Ukraine in 2017