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Patterns and Drivers of the Agri-Food Intra-Industry Trade of European Union Countries

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  • Bojnec, Stefan
  • Ferto, Imre

Abstract

This paper investigates the drivers of agri-food intra-industry trade (IIT) indices in the European Union (EU-27) member states during the period from 2000–2011. The increased proportion of IIT in matched two-way agri-food trade of the EU-27 member states is consistent with economic integration and economic growth. When export prices were at least 15% higher than the import prices, high-vertical IIT, increased for most member states. This finding suggests that quality improvements occurred when comparing agri-food exports to similar imports of agri-food products. The IIT indices for both horizontal and vertical IIT are positively associated with higher economic development levels, new EU membership and EU enlargement. Additionally, as higher levels of economic development decreases, the size of the economy and marginal IIT increases the effects of agri-food trade liberalization on the costs of the labor market adjustment. Understanding how improvements in agri-food trade quality impact agribusiness and managerial competitiveness reveal significant policy implications.

Suggested Citation

  • Bojnec, Stefan & Ferto, Imre, 2016. "Patterns and Drivers of the Agri-Food Intra-Industry Trade of European Union Countries," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(2), pages 1-22, May.
    • Handle: RePEc:ags:ifaamr:234956
    DOI: 10.22004/ag.econ.234956
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    7. Hosoe, Nobuhiro & Akune, Yuko, 2019. "Impact of Trade Liberalization on the Japanese Agri-food Sectors: A General Equilibrium Analysis with Farm Heterogeneity and Product Differentiation," Conference papers 333025, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Aggarwal, Sakshi & Chakraborty, Debashis, 2017. "Determinants of India’s Bilateral Intra-Industry Trade over 2001-15: Empirical Results," MPRA Paper 78020, University Library of Munich, Germany.
    9. Aggarwal, Sakshi, 2017. "Sectoral Level Analysis of India’s Bilateral Trade over 2001-2015," MPRA Paper 80099, University Library of Munich, Germany.
    10. Brkić Snježana & Kastratović Radovan & Salkica Mirela Abidović, 2021. "Analysis of Intra-Industry Trade in Agri-Food Products Between Bosnia and Herzegovina and the European Union," South East European Journal of Economics and Business, Sciendo, vol. 16(2), pages 53-67, December.
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    14. Nobuhiro Hosoe & Yuko Akune, 2019. "Can the Japanese Agri-food Sectors Survive by Promoting their Exports?:A General Equilibrium Analysis with Farm Heterogeneity and Product Differentiation," GRIPS Discussion Papers 19-06, National Graduate Institute for Policy Studies.
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