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Intra-industry Trade in Croatia: Trends and Determinants

Author

Listed:
  • Hrvoje Josic

    (Faculty of Economics and Business, University of Zagreb)

  • Berislav Zmuk

    (Faculty of Economics and Business, University of Zagreb)

Abstract

This paper investigates trends and determinants in intra-industry trade in Croatia. Intra-industry trade refers to a two-way trade of differentiated products. The level of intra-industry trade between Croatia and EU, CEE, and countries worldwide is calculated using the Grubel-Lloyd index under HS-2 and HS-4 product groups. Dynamic changes in intra-industry trade are shown by calculating marginal intra-industry trade indices. In addition to this, bilateral weighted adjusted intra-industry trade indices for Croatia and 24 most important trading partner countries are calculated in the period from 2001 to 2017. A panel-econometric analysis investigates the determinants of intra-industry trade in Croatia using a random effects model due to time-invariant characteristics of some determinants. The results of the analysis show that gross domestic product, common border, EU membership, and the distance between Croatia and trading partner countries have significant influence on the level of intra-industry trade in Croatia.

Suggested Citation

  • Hrvoje Josic & Berislav Zmuk, 2020. "Intra-industry Trade in Croatia: Trends and Determinants," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 22(1), pages 5-39, June.
    • Handle: RePEc:iez:survey:ces-v22_1-2020_josic-zmuk
    as

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    File URL: https://hrcak.srce.hr/file/346872
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    References listed on IDEAS

    as
    1. Orszaghova, Lucia & Schudel, Willem & Dautović, Ernest, 2014. "Intra-industry trade between CESEE countries and the EU15," Working Paper Series 1719, European Central Bank.
    2. Stanislav Cernosa, 2007. "Horizontal and Vertical Intra-Industry Trade between the Former CEFTA Countries and the European Union," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 5(2), pages 157-178.
    3. Jelena Trivic & £ukasz Klimczak, 2015. "The determinants of intra-regional trade in the Western Balkans," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 33(1), pages 37-66.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Saurabh Kumar Bharti & Syeedun Nisa, 2023. "Evaluation of the Impact of Regional Trade Agreements on Indian Exports," Journal of Asian Economic Integration, , vol. 5(1), pages 51-63, April.

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    More about this item

    Keywords

    intra-industry trade; Grubel-Lloyd index; Croatia; panel analysis;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

    Statistics

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