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Intra-industry trade for agri-food products in the enlarged European Union

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  • Fertő, Imre

Abstract

International trade theory suggests that advanced trade integration may lead to higher level of IIT. The enlargement of the European Union during last decade is as a good example to analyse the IIT in agri-food products. The aim of the paper is to analyse the pattern and drivers of IIT within European Union between 1999 and 2010. Previous empirical studies fail to provide an exact link between the theory and the data. Thus, we employ a new empirical strategy developed to test the predictions of Helpman and Krugman (1985) model. At the country level, Belgium, France, Netherlands and Germany report the highest level of IIT within the EU. Our calculations mainly support the Cieslik’s (2005) proposal to find the missing link between empirics and theory of IIT. In addition, our results are robust to various IIT indices and subsamples.

Suggested Citation

  • Fertő, Imre, 2013. "Intra-industry trade for agri-food products in the enlarged European Union," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158846, Agricultural Economics Society.
  • Handle: RePEc:ags:aesc13:158846
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    References listed on IDEAS

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    1. Marius Brülhart, 2009. "An Account of Global Intra-industry Trade, 1962-2006," The World Economy, Wiley Blackwell, vol. 32(3), pages 401-459, March.
    2. David Greenaway & Robert Hine & Chris Milner, 1994. "Country-specific factors and the pattern of horizontal and vertical intra-industry trade in the UK," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(1), pages 77-100, March.
    3. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    4. Jing Wang, 2009. "The analysis of intra-industry trade on agricultural products of China," Frontiers of Economics in China, Springer;Higher Education Press, vol. 4(1), pages 62-75, March.
    5. Flam, Harry & Helpman, Elhanan, 1987. "Vertical Product Differentiation and North-South Trade," American Economic Review, American Economic Association, vol. 77(5), pages 810-822, December.
    6. Juliette Milgram-Baleix & Ana I. Moro-Egido, 2010. "The Asymmetric Effect of Endowments on Vertical Intra-industrial Trade," The World Economy, Wiley Blackwell, vol. 33(5), pages 746-777, May.
    7. Bergstrand, Jeffrey H, 1990. "The Heckscher-Ohlin-Samuelson Model, the Linder Hypothesis and the Determinants of Bilateral Intra-industry Trade," Economic Journal, Royal Economic Society, vol. 100(403), pages 1216-1229, December.
    8. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
    9. Andrzej Cieslik, 2005. "Intraindustry Trade and Relative Factor Endowments," Review of International Economics, Wiley Blackwell, vol. 13(5), pages 904-926, November.
    10. Imre Fertö, 2005. "Vertically Differentiated Trade and Differences in Factor Endowment: The Case of Agri-Food Products between Hungary and the EU," Journal of Agricultural Economics, Wiley Blackwell, vol. 56(1), pages 117-134.
    11. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    12. Poornima Varma, 2012. "An analysis of India’s bilateral intra-industry trade in agricultural products," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 83-95.
    13. Richard J. Sexton, 2013. "Market Power, Misconceptions, and Modern Agricultural Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 209-219.
    14. Imre Fertő & Attila Karoly Soos, 2009. "Treating trade statistics inaccuracies: the case of intra-industry trade," Applied Economics Letters, Taylor & Francis Journals, vol. 16(18), pages 1861-1866.
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    More about this item

    Keywords

    intra-industry trade; agri-food products; EU; International Relations/Trade; F14; F15; Q17;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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