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Determinants of agro-food trade competition of Central European countries with the European Union

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  • BOJNEC, Stefan
  • FERTO, Imre

Abstract

The two-way trade flows are classified into four competition categories: successful price competition when trade surplus is at lower export than import price, unsuccessful price competition when trade deficit is at higher export than import price, successful quality competition when trade surplus is at higher export than import price, and unsuccessful quality competition when trade deficit is at lower export than import price. Using a panel dataset of determinants of agro-food trade competition between the five Central European Countries (Czech Republic, Hungary, Poland, Slovakia, and Slovenia) and the European Union, we found the effect of trade balance on trade competition to be more significant than the effect of export-import unit values. Natural, and to a lesser extent human factor endowments increase price and quality competition and reduce unsuccessful price and quality competition. R&D expenditures improve quality competition and reduce price competition. Foreign direct investment reduces unsuccessful price competition and increases unsuccessful quality competition. The size of the economy improves price competition and reduces quality competition. Consumer demands associated with higher level of income per capita increase unsuccessful price and quality competition.

Suggested Citation

  • BOJNEC, Stefan & FERTO, Imre, 2009. "Determinants of agro-food trade competition of Central European countries with the European Union," China Economic Review, Elsevier, vol. 20(2), pages 327-337, June.
  • Handle: RePEc:eee:chieco:v:20:y:2009:i:2:p:327-337
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    Cited by:

    1. Ferto, Imre & Fogarasi, Jozsef, 2011. "On Trade Impact of Exchange Rate Volatility and Institutional Quality: The Case of Central European Countries," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114351, European Association of Agricultural Economists.
    2. Jambor, Attila, 2011. "Impacts of EU Accession on Hungarian Primary and Processed Agricultural Trade," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108946, Agricultural Economics Society.

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