Patterns and determinants of intra-industry trade in agri-food products between Bosnia and Herzegovina and CEFTA 2006

Abstract

The paper aims to identify patterns and country-specific determinants of intra-industry trade (IIT) in agri-food products between Bosnia and Herzegovina (BiH) and other CEFTA 2006 parties in the period 2008-2018. The purpose of the paper is to contribute to filling the gap in the empirical literature on IIT of the South East European countries, especially in regard to non-manufacturing sectors. To investigate IIT intensity and structure the analysis employed Grubel- Lloyd indices and GHM methodology based on relative unit values. In order to examine the impact of various determinants on IIT in agri-food products, a random-effects Heckman selection model was estimated, following a sector-level approach in the analysis. The analysis indicates a lower level of IIT than expected and a strong dominance of its vertical type in all BiH bilateral relations within CEFTA 2006. The empirical results also suggest that the major determinants positively affecting IIT in agri-food products include the size of the trading economies, the similarity in their ethnic structure, membership in the common regional trade agreement, and common borders. By contrast, the results indicate that IIT is negatively affected by differences between the trading economies in terms of productivity and gross domestic product per capita.

How CEFTA influenced the competitiveness of agri-food trade in the Western Balkans

“…Bosnia and Herzegovina has relatively low export performance on the global market. Looking at the agri-food export and import trends of Bosnia and Herzegovina with CEFTA economies through their intra-industry foreign trade,Brkić et al (2021) noticed how certain variables had a positive impact on intraindustry agri-food trade between Bosnia and Herzegovina and the economies of the CEFTA region in the period 2008-2018. These variables are the size of theAGRI-FOOD TRADE IN THE WESTERN BALKANS…”