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Contents Introduction

This paper analyses recent changes in the technological intensity of foreign trade in EastEuropean and Asian transitional economies. The paper deals with 14 transitional economies, including economies whose trade patterns have not been extensively analysed previously (such as constituent parts of the former Soviet Union). To evaluate the trade performance of transitional economies, the paper uses as a benchmark the technological intensity of Asian Newly Industrialized Economies. The primary conclusion of the paper is that in almost every transitional economy the share of technologically-intensive manufacturing products still remains very low, exceeding 10 per cent in only 3 economies (Hungary, China, and Estonia). After identifying manufacturing sectors in which transitional economies most significantly expanded their comparative advantages, I found that instead of the much-needed technological restructuring, several transitional economies even further deepened their original specialization in technologically unsophisticated industries. The paper considers possible explanations for the failure of most transitional economies to upgrade the technological intensity of their exports.