Country-Specific Determinants of Horizontal and Vertical Intra-industry Agri-food Trade: The Case of the EU New Member States

Attila Jambor

Journal of Agricultural Economics, 2014, vol. 65, issue 3, 663-682

Abstract: type="main" xml:id="jage12059-abs-0001">

Intra-industry trade (IIT) has become a widespread phenomenon with a growing role in international trade, though agricultural trade is usually neglected in empirical works. This article identifies the determinants of horizontal and vertical intra-industry agri-food trade between New Member States (NMS) and the EU-27 in 1999–2010, by applying static and dynamic models with different specifications to panel data. Results show that IIT is mainly of a vertical nature in the NMS, though the majority of NMS export low quality agri-food products to EU-27 markets. Factor endowments are negatively related to agri-food horizontal intra-industry trade (HIIT), but positively to vertical intra-industry trade (VIIT). Economic size is positively and significantly related to both types of IIT, while distance and IIT are found to be negatively related in both cases. Results also suggest that HIIT and VIIT are greater if a New Member State exports agri-food products to another NMS while EU accession has had positive and significant impacts on both HIIT and VIIT, suggesting that economic integration fosters IIT.

Date: 2014
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