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Intra-industry Trade of Transition Countries: Trends and Determinants

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  • Yener Kandogan

Abstract

This paper analyzes trends in different components of trade of transition countries. To explain the cross-country differences, the paper points out the important distinction between the determinants of inter-industry trade and intra-industry trade (IIT), and horizontal and vertical IIT. Using varieties of gravity models, it is shown that variables from Increasing Returns Trade Theory, such as scale economies, similarity of income levels, and number of varieties produced play important roles in IIT, especially in horizontal IIT, whereas factors such as comparative advantage, dissimilarity in income levels, and having more developed trade partners of Heckscher-Ohlin Trade Theory are crucial in determining inter-industry trade and vertical IIT to a lesser degree.

Suggested Citation

  • Yener Kandogan, 2003. "Intra-industry Trade of Transition Countries: Trends and Determinants," William Davidson Institute Working Papers Series 2003-566, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2003-566
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    Cited by:

    1. Snježana Brkić & Radovan Kastratović & Mirela Abidović Salkica, 2021. "Patterns And Determinants Of Intra-Industry Trade In Agri-Food Products Between Bosnia And Herzegovina And Cefta 2006," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 66(229), pages 7-36, April – J.
    2. Stojčić, Nebojša & Vojinić, Perica & Aralica, Zoran, 2018. "Trade liberalization and export transformation in new EU member states," Structural Change and Economic Dynamics, Elsevier, vol. 47(C), pages 114-126.
    3. Roy, Jayjit, 2017. "On the environmental consequences of intra-industry trade," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 50-67.
    4. Jámbor, Attila, 2013. "Country-specific determinants of horizontal and vertical intra-industry agri-food trade: the case of Bulgaria and Romania," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 7(4-5), pages 1-8.
    5. Vadym Konchyn, 2008. "Evolution of Ukrainian Economy: New Trade Theory Evidence," The IUP Journal of Applied Economics, IUP Publications, vol. 0(2), pages 80-110, March.
    6. Leitão, Nuno Carlos, 2012. "Globalization and United States’ Intra-Industry Trade," MPRA Paper 39756, University Library of Munich, Germany.
    7. Maylene Y. Damoense-Azevedo & André C. Jordaan, 2012. "Factors influencing bilateral intra-industry trade in the auto industry: the case of South Africa," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 63-82.
    8. Patryk Emanuel TOPOROWSKI, 2017. "Did the economic crisis change V4 trade patterns? The case of intra-industry trade," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 8, pages 71-93, December.
    9. Seyed-Rohollah Ahmadi, 2016. "The Impact of Sanction on Bilateral Intra-Industry Trade between Iran and SCO Countries," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 20(3), pages 277-293, Summer.
    10. Banerjee, Sarmila & Bhattacharyya, Ranajoy, 2004. "Does economic development cause intra-industry trade? The case of India: 1971 to 2000," MPRA Paper 30961, University Library of Munich, Germany, revised 2004.
    11. Attila Jambor, 2013. "Country-specific determinants of horizontal and vertical intra-industry agri-food trade of the Visegrad Countries," FIW Working Paper series 104, FIW.
    12. Jambor, Attila & Torok, Aron, 2013. "Intra-industry agri-food trade of the Baltic Countries," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158684, Agricultural Economics Society.
    13. Vogiatzoglou, Klimis, 2005. "Varieties or Qualities? Horizontal and Vertical Intra-industry Trade within the NAFTA Trade Bloc," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 6(2), pages 1-13.
    14. Nuno Carlos Leitão, 2013. "The Impact of Immigration on Portuguese Intra-Industry Trade," Working Papers 2013.20, Fondazione Eni Enrico Mattei.
    15. Valerija Botric, 2012. "Intra-industry Trade between the European Union and Western Balkans: A Close-up," Working Papers 1202, The Institute of Economics, Zagreb.
    16. Li, Fangyi & Song, Zhouying & Liu, Weidong, 2014. "China's energy consumption under the global economic crisis: Decomposition and sectoral analysis," Energy Policy, Elsevier, vol. 64(C), pages 193-202.
    17. Lukasz Ambroziak, 2012. "FDI and intra-industry trade: theory and empirical evidence from the Visegrad Countries," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 180-198.

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    More about this item

    Keywords

    Vertical and horizontal intra-industry trade; transition countries; gravity models;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

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