Intra-industry Trade between the European Union and Western Balkans: A Close-up
After the collapse of socialism, ex-centrally planned economies underwent the transition process towards the market economy with more or less success. The now so-called Western Balkans region was additionally burdened by the war, which disrupted previously existing trading routes, contributed to the delay in the transition process and increased the gap not only between them and more advance market economies, but also other transition economies in the region. This has significantly influenced the speed of the EU integration processes of these countries. The accession and participation on the common EU market bring additional challenges to these rather non-competitive economies. What comes into perspective when having in mind the integration prospects, is the evolution of trade between these countries and EU. Trade patterns are used as one of the indicators of whether we should look for integrating forces between EU countries and Western Balkan countries. The countries included in the analysis are: Albania, Bosnia and Herzegovina, Croatia, FYR Macedonia, Kosovo, Serbia and Montenegro. For each country in the sample, the intra-industry trade (IIT) with new and old EU member states is analyzed in total, along with horizontal and vertical trade. The analysis is performed on a 4-digit level of Combined Nomenclature (CN).
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