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Determinants of Intra-Industry Trade: An Investigation with Bma for the European Union

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  • Krzysztof Beck

    (Lazarski University, Poland)

Abstract

The empirical literature on determinants of intra-industry trade (IIT) is vast and comprehensive, yet as the authors failed to properly account for model uncertainty it has brought inconsistent and conflicting results. To resolve this issue, Bayesian model averaging was applied to investigate the robustness of 48 potential determinants of bilateral IIT for the panel of 26 European Union countries over the 1999-2011 period. Application of BMA demonstrated that 11 of them are robust determinants of IIT, namely real GDP product, trade openness, membership in the European Union and the Euro area, corruption, and differences in factor abundance. Among the factors of production, the key role in the determination of IIT patterns can be assigned to the differences in human capital. Yet, transportation cost and cultural similarity have no impact on the IIT patterns.

Suggested Citation

  • Krzysztof Beck, 2020. "Determinants of Intra-Industry Trade: An Investigation with Bma for the European Union," Journal of International Business Research and Marketing, Inovatus Services Ltd., vol. 5(6), pages 19-22, September.
    • Handle: RePEc:mgs:jibrme:v:5:y:2020:i:6:p:19-22
    DOI: 10.18775/jibrm.1849-8558.2015.56.3003
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    References listed on IDEAS

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    More about this item

    Keywords

    intra-industry trade; Bayesian model averaging; European Union;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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