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Intra-Industry Trade in Horizontally and Vertically Differentiated Agri-Food Products between Hungary and the EU

  • Ferto, Imre
  • Hubbard, Lionel J.

Intra-industry trade in agri-food products between Hungary and the EU is shown to be low and dominated by vertically rather than horizontally differentiated products, suggesting higher economic adjustment costs. Following recent empirical studies, we then test econometrically for the determinants of this trade using different measures of horizontal and vertical trade, and employing an array of popular explanatory variables. Results suggest that separating the measure of intra-industry trade into vertical and horizontal provides for better estimation and supports the contention that the determinants may differ by type of trade. In the regression analysis, the level of intra-industry trade is found to serve as a better dependent variable than the degree or share of intra-industry trade.

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File URL: http://purl.umn.edu/24884
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Paper provided by European Association of Agricultural Economists in its series 2002 International Congress, August 28-31, 2002, Zaragoza, Spain with number 24884.

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Date of creation: 2002
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Handle: RePEc:ags:eaae02:24884
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  1. Carmela Martin & Jose V. Blanes, 1999. "The Nature and Causes of Intra-Industry Trade: Back to the Comparative Advantage Explanation? The Case of Spain," European Economy Group Working Papers 1, European Economy Group.
  2. Falvey, Rodney E., 1981. "Commercial policy and intra-industry trade," Journal of International Economics, Elsevier, vol. 11(4), pages 495-511, November.
  3. Motta, Massimo, 1992. "Sunk Costs and Trade Liberalisation," Economic Journal, Royal Economic Society, vol. 102(412), pages 578-87, May.
  4. David Greenaway & Robert C. Hine, 1991. "Intra-Industry Specialization, Trade Expansion and Adjustment in the European Economic Space," Journal of Common Market Studies, Wiley Blackwell, vol. 29(6), pages 603-622, December.
  5. Lionel Fontagné & Michaël Freudenberg, 1997. "Intra-Industry Trade: Methodological Issues Reconsidered," Working Papers 1997-01, CEPII research center.
  6. Kamal Abd-el-Rahman, 1991. "Firms’ competitive and national comparative advantages as joint determinants of trade composition," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 127(1), pages 83-97, March.
  7. Lars Nilsson, 1997. "The measurement of intra-industry trade between unequal partners," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 133(3), pages 554-565, September.
  8. Douglas Cooper & David Greenaway & Anthony Rayner, 1993. "Intra-Industry trade and limited producer horizons: An empirical investigation," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 129(2), pages 345-366, June.
  9. Ramkishen Rajan, 1996. "Measures of intra-industry trade reconsidered with reference to Singapore’s bilateral trade with Japan and the United States," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 132(2), pages 378-389, September.
  10. Greenaway, David & Milner, Chris & Elliott, Robert J R, 1999. " UK Intra-industry Trade with the EU North and South," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(3), pages 365-84, August.
  11. Lars Nilsson, 1999. "Two-way trade between unequal partners: The EU and the developing countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(1), pages 102-127, March.
  12. Greenaway, David & Hine, Robert C & Milner, Chris, 1995. "Vertical and Horizontal Intra-industry Trade: A Cross Industry Analysis for the United Kingdom," Economic Journal, Royal Economic Society, vol. 105(433), pages 1505-18, November.
  13. Lancaster, Kelvin, 1980. "Intra-industry trade under perfect monopolistic competition," Journal of International Economics, Elsevier, vol. 10(2), pages 151-175, May.
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