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The Intra-Industry Trade of the Czech Republic in the Economic Transition

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  • KAREL JANDA
  • DANIEL MÜNICH

Abstract

In this paper, we provide an overview of the development of Czech trade and its structure and investigate the nature of Czech intra-industry trade (IIT) and its labor market determinants. We evaluate the evolution of the Czech trade in the context of other transition economies--the Central European Free Trade Agreement (CEFTA) countries, the Baltic countries, and the Commonwealth of Independent States (CIS). In our analysis, we use decomposition of IIT into vertical and horizontal components. The Czech Grubel-Lloyd index (GLI) of 75 percent at the SITC two-digit level is still somehow lower than the values for comparable EU countries, but this difference is not high. This indicates a relatively high level of Czech integration into European and world economies. This result is supported by the comparison of IIT in the trade between the European Union and seven European transition economies undertaken by Fidrmuc (2000), showing that the Czech Republic has the highest IIT out of all these countries. Also, the structure of Czech IIT with respect to its horizontal and vertical elements is comparable with the structure of IIT in EU countries. The results of our cross-industry analysis of labor market determinants of IIT show that qualitative characteristics of the labor force are statistically significant predictors for IIT after controlling for time changes and character of industry.

Suggested Citation

  • Karel Janda & Daniel Münich, 2004. "The Intra-Industry Trade of the Czech Republic in the Economic Transition," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 40(2), pages 27-50, March.
    • Handle: RePEc:mes:emfitr:v:40:y:2004:i:2:p:27-50
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    2. Pavel Ciaian & d'Artis Kancs & Jan Pokrivcak, 2008. "Comparative Advantages, Transaction Costs and Factor Content of Agricultural Trade: Empirical Evidence from the CEE," EERI Research Paper Series EERI_RP_2008_03, Economics and Econometrics Research Institute (EERI), Brussels.
    3. García, Pablo Marcelo, 2005. "Measuring Willingness-to-Pay in Discrete Chice Models with Semi-Parametric Techniques," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB) "San Pablo", issue 5, pages 83-100, Octubre.
    4. Tomasz Brodzicki, 2011. "Handel zagraniczny panstw Grupy Wyszehradzkiej. Zmiany strukturalne i rola handlu wewnatrzgaleziowego," Working Papers of Economics of European Integration Division 1104, The Univeristy of Gdansk, Faculty of Economics, Economics of European Integration Division.
    5. Ciaian, Pavel & Kancs, d'Artis & Pokrivcak, Jan, 2011. "Comparative Advantages, Transaction Costs and Factor Content in Agricultural Trade: Empirical Evidence from the CEE - Vantaggi comparati, costi di transazione e contenuto dei fattori nel commercio agr," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 64(1), pages 67-101.
    6. Joanna Kuczewska & Maciej Krzeminski, 2011. "Regional constructed advantages – case of Pomeranian Region in Poland," Working Papers of Economics of European Integration Division 1105, The Univeristy of Gdansk, Faculty of Economics, Economics of European Integration Division.
    7. Valerija Botric, 2012. "Intra-industry Trade between the European Union and Western Balkans: A Close-up," Working Papers 1202, The Institute of Economics, Zagreb.
    8. Jarko Fidrmuc, 2005. "Trade Structure during Accession to the EU," Post-Communist Economies, Taylor & Francis Journals, vol. 17(2), pages 225-234.

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