The Structure of EU-CEE Intra-Industry Trade

Rodney Thom

Working Papers from College Dublin, Department of Political Economy-

Abstract: This paper presents an analysis of the growth and structure of EU-CEE intra-industry trade since the latter commenced their economic transition in the late 1980's. Section 2 outlines the economic rationale for intra-industry trade and its classification into horizontal and vertical two-way trade. Section 3 discusses the empirical classification of trade flows. Rather than relying on the conventional Grubel-Lloyd index as an indicator of intra-industry trade the analysis uses a decomposition due to Fontagne and Freudenberg (1997a, 1997b) which provides consistency between theory and measurement. Section 4 uses this technique to decompose EU-CEE trade flows over 1990 to 1995. Dection 6 addresses the issue of adjustment costs by distinguishing between static and dynamic, or marginal, trade flows.

Keywords: TRADE; MONETARY UNION; ECONOMIC INTEGRATION; INDUSTRIAL DEVELOPMENT (search for similar items in EconPapers)
JEL-codes: E42 F10 O11 O40 (search for similar items in EconPapers)
Pages: 25 pages
Date: 1999
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:dublec:99/1

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