COMPARATIVE ADVANTAGES OF BULGARIA IN INTERNATIONAL TRADE IN SERVICES FOR THE PERIOD 2011-2020

Abstract

The article examines the foreign trade in services of Bulgaria. Nowadays the services sector has a leading role in the gross output of most countries in the world. It covers a diverse range of services, which to one degree or another affect other sectors of the economy. However, due to their intangible nature and especially due to the impossibility of storing the quantities produced services are more difficult to trade internationally than material goods. The share of services in world foreign trade is several times smaller than that of material goods, but in recent years the rate of increase in trade in services has been higher than the rate of increase in material goods. This is reason to believe that the potential of services as a factor for economic growth is increasing. Therefore, it is normal for individual countries, depending on the specifics of their resource endowment, to specialize in the production and export of certain services in terms of economic efficiency. With regard to the present study the thesis can be defined that Bulgaria whose production of services forms more than half of the total production has comparative advantages and specialization in some services in international trade. The aim is to identify those groups of services in which the country has comparative advantages and specialization and to establish their dynamics during the period under review.

The concept of comparative advantages has existed for over 2 centuries and attempts to measure them by the index method began to be made in the late 50s of last century. Since then, numerous indices have been proposed in the economic literature. The main disadvantage of some of them is that only export trade flows are taken into account. Therefore, a situation may arise in which the country has large imports of a product, even exceeding exports, but it can be concluded that there are export comparative advantages. Therefore, three indices are used in the present study. Two of them include data not only on export but also on import trade flows. The following methods have been: historical and logical, mathematical and statistical methods - mainly the index method, analysis and synthesis, deduction and the descriptive method.