Intra-industry Trade in Croatia: Trends and Determinants

Hrvoje Josic () and Berislav Zmuk ()
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Hrvoje Josic: Faculty of Economics and Business, University of Zagreb
Berislav Zmuk: Faculty of Economics and Business, University of Zagreb

Croatian Economic Survey, 2020, vol. 22, issue 1, 5-39

Abstract: This paper investigates trends and determinants in intra-industry trade in Croatia. Intra-industry trade refers to a two-way trade of differentiated products. The level of intra-industry trade between Croatia and EU, CEE, and countries worldwide is calculated using the Grubel-Lloyd index under HS-2 and HS-4 product groups. Dynamic changes in intra-industry trade are shown by calculating marginal intra-industry trade indices. In addition to this, bilateral weighted adjusted intra-industry trade indices for Croatia and 24 most important trading partner countries are calculated in the period from 2001 to 2017. A panel-econometric analysis investigates the determinants of intra-industry trade in Croatia using a random effects model due to time-invariant characteristics of some determinants. The results of the analysis show that gross domestic product, common border, EU membership, and the distance between Croatia and trading partner countries have significant influence on the level of intra-industry trade in Croatia.

Keywords: intra-industry trade; Grubel-Lloyd index; Croatia; panel analysis (search for similar items in EconPapers)
JEL-codes: F14 F15 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:iez:survey:ces-v22_1-2020_josic-zmuk

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