21 glance at the correlation matrix leads to the observation that the composition of imports appears to be more similar than the composition of exports. Interestingly correlations between import baskets of Mexico and Turkey, on the one hand, and that of CEEC-10, on the other, are very high of 0.97 and 0.99. Malaysia's imports seem to be different overall from CEEC (0.77), although its correlation with some CEEC is very high-for instance, Estonia (0.99). Among CEEC, the lowest correlation is for the following country-pairs: Slovenia and Romania (0.46), Poland and Romania (0.59), Estonia and Slovenia (0.58). In all, the correlation between Romania's imports and aggregate CEEC-10 imports is the weakest among CEEC.

Table **9: Correlation coefficients of exports and imports from the** EU, **1997**

|Reporter \Partner|BGR|CZE|EST|HUN|LVA|LTU|POL|ROM|SVK|SVN|CEEC|TUR|MYS|MEX|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Bulgaria|1|0.86|0.97|0.73|0.93|0.92|0.77|0.94|0.76|0.68|0.84|0.86|0.98|0.72|
|Czech Republic|_0.64_|1|0.80|0.87|0.94|0.90|0.91|0.70|0.93|0.89|0.96|0.92|0.80|0.90|
|Estonia|_0.21_|_0.16_|1|0.68|0.90|0.89|0.69|0.98|0.69|0.58|0.78|0.80|0.99|0.63|
|Hungary|_0.59_|_0.87_|_0.62_|1|0.88|0.85|0.90|0.56|0.89|0.88|0.94|0.93|0.65|0.95|
|Latvia|_0.41_|_0.37_|_0.35_|_0.40_|1|0.99|0.93|0.82|0.93|0.87|0.97|0.97|0.88|0.90|
|Lithuania|_0.17_|_0.09_|_0.30_|_0.19_|**_0.81_**|1|0.93|0.83|0.92|0.86|0.95|0.97|0.88|0.88|
|Poland|**_a_**_70_|_0.92_|_0.28_|_0.83_|_05 3_|_030_|1|0.59|0.99|0.98|0.98|0.98|0.68|0.98|
|Romania|_0.59_|_0.75_|_0.04_|_0.57_|_0.41_|_0.28_|_0.79_|1|0.58|0.46|0.67|0.71|0.98|0.52|
|Slovakia|_0.48_|_0.82_|_0.21_|_0.75_|_0.23_|_0.16_|<br>_0.84_|_0.77_|1|0.98|0.98|0.97|0.68|0.97|
|Slovenia|_0.37_|_0.71_|_0.03_|_0.40_|_0.43_|_0.16_|<br>_0.64_|_0.50_|_0.43_|1|0.95|0.94|0.57|0.98|
|CEEC-10|**_a66_**|_0.97_|_0.37_|_0.90_|_0.47_|_0.22_|_0.96._|_0.76_|_0.86_|_0.69_|1|0.99|0.76|0.97|
|Turkey|_0.42_|_0.77_|_0.15_|_0.67_|_0.20_|_0.07_|<br>_0.83_|_0.69_|_0.89_|_0.56_|_0.82_|1|0.79|0.96|
|Malaysia|_0.09_|_0.15_|_0.86_|_0.58_|_0.19_|_0.15_|_0.12_|_0.04_|_0.10_|_0.02_|_0.29_|_0.04_|<br>1|0.62|
|Mexico|_0.41_|_053_|_0.84_|_0.87_|_0.37_|_0.21_|<br>_0.61_|_0.28_|_0.48_|_0.24_|_0.68_|_0.49_|_0.79_|<br>1|
|Memo items:|||||||||||||||
|1993 and 1997|0.93|0.92|0.82|0.82|0.94|0.87|0.96|0.98|0.75|0.98|0.97|0.94|0.96|0.97|
|Imports<br>1993 and 1997<br>Exports|0.85|0.94|0.68|0.69|0.80|0.73|0.89|0.67|0.43|0.84|0.92|0.93|0.59|0.58|

Note: Figures above the diagonal are correlation coefficients of imports and below the diagonal are correlation coefficients of exports (italics). Bold italics denote the largest value of correlation coefficient (For instance, Slovakia's composition of exports of parts to the EU displays the largest similarity to that of Turkey (0.89) and Romania's to Slovakia's one. For Mexico calculated on its trade with the United States, and for Malaysia on its trade with East Asia. Source: Computations based on partners' data from UN COMTRADE database.

Correlations between export structures reveal some interesting developments. First, since Mexican exports of parts and components to US markets have been almost exclusively shaped by fragmentation of production carried out by US-based MNCs, high level of correlation with Mexican exports may provide indication as to the extent of country's firms involvement in modern production sharing. By this measure, two CEEC stand out-Hungary (0.87) and Estonia (0.84). Estonia, with its high share of electronic parts, also displays high correlation with Malaysia. These two countries also have the largest shares of parts in their manufacture trade with the EU among CEEC.

Second, low levels of correlation for some country-pairs appear to indicate differences in patterns of integration through production sharing. Estonia again stands out-its correlation