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Intra-industry trade in the wine sector in the enlargedEuropean Union

Author

Listed:
  • Imre Fertő

    (Center for Economic and Regional Study, Corvinus University ofBudapest, University of Kaposvár, Kaposvár, Hungary)

  • Szilárd Podruzsik

    (Corvinus University of Budapest, Budapest, Hungary)

  • Jeremiás Balogh

    (Corvinus University of Budapest, Budapest, Hungary)

Abstract

International trade theory suggests that advancedtrade integration may lead to a higher level of intra-industrytrade. The enlargement of the European Union (EU) duringthe last decade is a good example to analyse the intra-industrytrade in wine products. The aim of the paper is to analyse thepattern and drivers of horizontal intra-industry trade in thewine sector within the EU between 2000 and 2011. We em-ploy an empirical strategy developed by Cieślik ( 2005 )totestHelpman and Krugman (1985) model. We find a growingtrend in intra-industry trade with dominance of vertical intra-industry trade. Estimations suggest that Belgium, France, theNetherlands and Germany report the highest level of intra-industry trade within the EU. The level of intra-industry tradeis highest among old member states. Empirical evidence indi-cates that the standard intra-industry theory finds some sup-port in our data when we control for the sum of capital tolabour ratios in the estimated equations instead of relativecountry-size variables. We find that the EU enlargement pos-itively influences total and vertical intra-industry trade while ithas negative impacts on horizontal intra-industry trade.Distance has negative effects on all types of intra-industrytrade.

Suggested Citation

  • Imre Fertő & Szilárd Podruzsik & Jeremiás Balogh, 2016. "Intra-industry trade in the wine sector in the enlargedEuropean Union," Review of Agricultural, Food and Environmental Studies, INRA Department of Economics, vol. 97(3), pages 159-172.
    • Handle: RePEc:rae:jouraf:v:97:y:2016:i:3:p:159-172
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    Cited by:

    1. Andrey A. Gnidchenko, 2019. "The Conflicting Ways to Dissect Intra-Industry Trade," FIW Working Paper series 193, FIW.
    2. Imre Fertő & Zoltán Bakucs & Jan Fałkowski, 2021. "Dairy sector trade dynamics: Some insights on the evolution of trade linkages within the EU," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(3), pages 698-711, September.
    3. Fertö, I., 2017. "Economic Crisis And the Fragility of World Wine Export," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 9(4).

    More about this item

    Keywords

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    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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