Bilateral economic relations between Slovakia and Ukraine: modern stage and future trends

Abstract

Bilateral economic relations between Slovakia and Ukraine can be characterized as dynamical. Among main factors that determine bilateral cooperation are geographical location, common co-existence under Socialistic economic framework, closeness of cultures, languages and mentalities. It is identified that up to 40 % of the Slovak export to Ukraine is high-tech commodities along with negative trade balance for Slovakia and import of raw materials from Ukraine. We ran gravity model to estimate the bilateral trade between Slovakia and Ukraine. The model showed the negative impact of distance on the growth of bilateral trade (both in goods and services). The size of GDP was significant for bilateral trade in goods, where the size of the Ukrainian economy has positive impact on turnover. We think, that this is the illustration of the Slovak exports to Ukraine, where automobiles have the largest share, thus the growing demand for the Slovak goods depends fully on the GDP growth.