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Drivers of vertical intra-industry trade: the case of the Hungarian agri-food sector

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  • Imre Ferto
  • Attila Jambor

Abstract

This article investigates the drivers of vertical intra-industry trade (VIIT) in Hungarian agri-food trade with the European Union (EU). It identifies three possible ways to measure intra-industry trade (IIT) flows (GHM, FF, and N methods) and defines six hypotheses to test for the drivers of VIIT with three panel data models (static, dynamic, and FEVD). The results suggest that factor endowments are negatively, while economic size is positively and significantly related to VIIT. Distance and VIIT were found to be negatively related as is commonly the case in the standard gravity model. It was also found that VIIT is greater if a New Member State (NMS) is exporting agri-food produce to an NMS, while EU accession has ambiguously influenced the share of VIIT. In general, it seems that our results are independent from model estimations and interestingly they do not differ considerably as we a priori expected. Moreover, our results seem surprisingly robust across various measurements of ITT.

Suggested Citation

  • Imre Ferto & Attila Jambor, 2015. "Drivers of vertical intra-industry trade: the case of the Hungarian agri-food sector," Agricultural Economics, International Association of Agricultural Economists, vol. 46(1), pages 113-123, January.
    • Handle: RePEc:bla:agecon:v:46:y:2015:i:1:p:113-123
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    2. Hoang, Viet, 2019. "The Dynamics of Agricultural Intra-Industry Trade: A Comprehensive Case Study in Vietnam," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 74-82.
    3. 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.
    4. Attila JAMBOR & Jeremias BALOGH & Peter KUCSERA, 2016. "Country and industry specific determinants of intra-industry agri-food trade in the Baltic Countries," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 62(6), pages 280-291.
    5. Andrey A. Gnidchenko, 2019. "The Conflicting Ways to Dissect Intra-Industry Trade," FIW Working Paper series 193, FIW.
    6. Štefan Bojnec & Imre Fertő, 2017. "Quality Upgrades of EU Agri-Food Exports," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(1), pages 269-279, February.
    7. Shinichi Furuzawa & Lily Kiminami, 2017. "Changes in the international specialization of food manufacturing industry in East Asia," Asia-Pacific Journal of Regional Science, Springer, vol. 1(2), pages 359-378, October.

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