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Intra-industry Trade in an Enlarged Europe: Trend of Intra-industry Trade in the European Union and Its Determinants

Author

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  • Kang , Yoo-Duk

    (Korea Institute for International Economic Policy)

Abstract

In this paper I examine the evolution of intra-industry trade (IIT) in intra-European trade in the period of accession of the Central and Eastern European countries (CEEC). In order to identify changes in IIT in intra-European trade, I calculate the Grubel and Lloyd index for the static dimension and Brülhart A index for the dynamic dimension. Based on Grubel and Lloyd index, I conduct gravity-type empirical tests to verify determinants of IIT at the intra-European level. I find that CEECs experienced considerable increase in IIT, particularly during transitional periods before their accession. However, the level of IIT between CEECs is still considerably low. Given that a trade-investment nexus exists to explain IIT in intra-European trade, IIT in CEECs can increase further, as they receive more FDI from their neighbors.

Suggested Citation

  • Kang , Yoo-Duk, 2010. "Intra-industry Trade in an Enlarged Europe: Trend of Intra-industry Trade in the European Union and Its Determinants," Working Papers 10-2, Korea Institute for International Economic Policy.
    • Handle: RePEc:ris:kiepwp:2010_002
    DOI: 10.2139/ssrn.2488878
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    Cited by:

    1. Kulbacki Michał & Michalczuk Adrian, 2021. "Regional trade integration in Central and Eastern Europe: State of play after 15 years of EU membership," Journal of Economics and Management, Sciendo, vol. 43(1), pages 225-250, May.
    2. Ambroziak Łukasz, 2016. "FDI and Intra-industry Trade in the Automotive Industry in the New EU Member States," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 52(1), pages 23-42, December.

    More about this item

    Keywords

    Intra-industry Trade; Europe; Foreign Direct Investment; EU Enlargement; European Integration;
    All these keywords.

    JEL classification:

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

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