Intra-industry trade in the wine sector in the enlargedEuropean Union

Imre Fertő, Szilárd Podruzsik () and Jeremiás Balogh
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Szilárd Podruzsik: Corvinus University of Budapest, Budapest, Hungary
Jeremiás Balogh: Corvinus University of Budapest, Budapest, Hungary

Review of Agricultural, Food and Environmental Studies, 2016, vol. 97, issue 3, 159-172

Abstract: International trade theory suggests that advancedtrade integration may lead to a higher level of intra-industrytrade. The enlargement of the European Union (EU) duringthe last decade is a good example to analyse the intra-industrytrade in wine products. The aim of the paper is to analyse thepattern and drivers of horizontal intra-industry trade in thewine sector within the EU between 2000 and 2011. We em-ploy an empirical strategy developed by Cieślik ( 2005 )totestHelpman and Krugman (1985) model. We find a growingtrend in intra-industry trade with dominance of vertical intra-industry trade. Estimations suggest that Belgium, France, theNetherlands and Germany report the highest level of intra-industry trade within the EU. The level of intra-industry tradeis highest among old member states. Empirical evidence indi-cates that the standard intra-industry theory finds some sup-port in our data when we control for the sum of capital tolabour ratios in the estimated equations instead of relativecountry-size variables. We find that the EU enlargement pos-itively influences total and vertical intra-industry trade while ithas negative impacts on horizontal intra-industry trade.Distance has negative effects on all types of intra-industrytrade.

Keywords: Horizontal; and; vertical; intra-industry; trade.EUwine; industry.Helpman; and; Krugman; model.Tradeintegration (search for similar items in EconPapers)
Date: 2016
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Journal Article: Intra-industry trade in the wine sector in the enlarged European Union (2016)
Journal Article: Intra-industry trade in the wine sector in the enlarged European Union
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Persistent link: https://EconPapers.repec.org/RePEc:rae:jouraf:v:97:y:2016:i:3:p:159-172

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