Analysis of the Factors Influencing Bulgaria-China Trade Competitiveness Index before and after Bulgaria's Accession to the European Union

摘要

In this study, we want to examine the impact a small economy, such as Bulgaria, has when in the middle of two economic powers like China and the European Union (EU). We propose an OLS model to determine the factors which influence Bulgaria-China trade competitiveness index (TCI) for several groups manufactured goods and how Bulgaria's accession to the European Union affected them. The conducted study showed Bulgaria's stable and strong currency and low inflation rate have a positive impact on trade with China while the slow economic growth and unsteady economic situation prevents the bilateral trade from further development. According to our finding, the accession to the EU has a promoting but weaker than expected effect on Bulgaria-China trade competitiveness index. The results indicated, for an improved trade relationship with China, Bulgaria has to enhance R&D, attract more Chinese investments, and work on better absorption EU funds.