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FDI and intra-industry trade: theory and empirical evidence from the Visegrad Countries

Łukasz Ambroziak

International Journal of Economics and Business Research, 2012, vol. 4, issue 1/2, 180-198

Abstract: This paper analyses impact of the foreign direct investment (FDI) on the intra-industry trade (IIT) patterns in the Visegrad Countries (VCs) (the Czech Republic, Hungary, Poland and Slovakia) in the period 1995–2008. The FDI has been a driving force of these countries’ foreign trade, especially for the IIT. From the theory and previous empirical studies, it results that the FDI has a positive impact on vertical intra-industry trade (VIIT), while the influence of this variable on horizontal intra-industry trade (HIIT) is ambiguous. Using a panel data approach, the determinants of HIIT and VIIT were identified. The obtained results confirmed that the FDI in the VCs stimulated not only VIIT, but also HIIT.

Keywords: horizontal trade; vertical trade; FDI; foreign direct investment; Visegrad Group; Visegrad Four; V4; Central Europe; Czech Republic; Hungary; Poland; Slovakia; foreign trade; panel data; economics; business research; intra-industry trade. (search for similar items in EconPapers)
Date: 2012
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Handle: RePEc:ids:ijecbr:v:4:y:2012:i:1/2:p:180-198