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FDI and Intra-industry Trade in the Automotive Industry in the New EU Member States

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  • Ambroziak Łukasz

    (Warsaw School of Economics, Warsaw, Poland)

Abstract

This paper investigates the extent to which foreign direct investment (FDI) influenced intra-industry trade (IIT) in automotive products in six New EU Member States (the Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia) in the 1995–2014 period. Changes in IIT intensity are analysed using the Grubel-Lloyd indices. To examine the IIT pattern, IIT indices are divided into two types of trade: IIT in vertically differentiated products (low and high quality VIIT) and IIT in horizontally differentiated products (HIIT). The research indicates that IIT in automotive products allowed manufacturers and consumers from the new EU Member States to benefit more from international trade. FDI inflow to the automotive sector of the NMS has been a key factor shaping IIT in automotive products.

Suggested Citation

  • Ambroziak Łukasz, 2016. "FDI and Intra-industry Trade in the Automotive Industry in the New EU Member States," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 52(1), pages 23-42, December.
    • Handle: RePEc:vrs:ijomae:v:52:y:2016:i:1:p:23-42:n:3
    DOI: 10.1515/ijme-2016-0025
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    More about this item

    Keywords

    foreign direct investment (FDI); intra-industry trade (IIT); automotive industry; new EU Member States;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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