IDEAS home Printed from https://ideas.repec.org/a/aka/aoecon/v66y2016i2p283-306.html
   My bibliography  Save this article

Intra-Industry Trade in the Visegrad Countries: Does the Linder Hypothesis Hold?

Author

Listed:
  • Martin Grančay

    () (Faculty of International Relations, Department of International Economic Relations and Economic Diplomacy, University of Economics in Bratislava, Slovak Republic)

  • Nóra Grančay

    () (Faculty of International Relations, Department of International Economic Relations and Economic Diplomacy, University of Economics in Bratislava, Slovak Republic)

  • Jolita Vveinhardt

    () (Institute of Sport, Science and Innovations, Lithuanian Sports University, Lithuania
    Vytautas Magnus University, Lithuania)

Abstract

In 1961, Staffan Linder attacked mainstream trade economics by diverging from the generally accepted factor endowments theory and focusing on alternative explanations of why countries trade with each other. He was among the first economists to recognise the growing importance of intra-industry trade and presented his hypothesis that the more similar the per capita income levels of countries, the more they tend to trade with each other. This observation has since become one of the main pillars of modern trade theory. The present paper assesses the empirical validity of the Linder hypothesis in the Visegrad countries. Using a variant of the gravity model, it finds that when controlling for other factors, the Visegrad countries tend to trade more with countries with similar per capita income levels than with significantly richer or poorer countries. This observation is consistent with the Linder hypothesis. OLS regressions, Tobit regressions, and robustness checks all support the hypothesis.

Suggested Citation

  • Martin Grančay & Nóra Grančay & Jolita Vveinhardt, 2016. "Intra-Industry Trade in the Visegrad Countries: Does the Linder Hypothesis Hold?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 66(2), pages 283-306, June.
  • Handle: RePEc:aka:aoecon:v:66:y:2016:i:2:p:283-306
    Note: This research was funded by the Cultural and Educational Grant Agency of the Ministry of Education, Science, Research and Sport of the Slovak Republic (Grant No. 017EU-4/2015). The authors would like to thank Rachael Leuenberger for revising the English text.
    as

    Download full text from publisher

    File URL: http://www.akademiai.com/doi/pdf/10.1556/032.2016.66.2.5
    Download Restriction: subscription

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Linder hypothesis; intra-industry trade; gravity model; Visegrad countries;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aka:aoecon:v:66:y:2016:i:2:p:283-306. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vajda, Lőrinc). General contact details of provider: http://www.akkrt.hu .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.