2009
DOI: 10.1556/aoecon.59.2009.1.1
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Vertical intra-industry trade, technology and income distribution: A panel data analysis of EU trade with Central-East European countries

Abstract: This paper tests a neo-Heckscher-Ohlin versus a neo-Ricardian framework for explaining vertical intra-industry trade. The study applies panel techniques with instrument variables to analyse trade between ‘old’ EU and 10 Central-East European countries in their post-transition period. Results show country-pair fixed effects to be of high relevance for explaining vertical intra-industry trade. Technology differences are positively, while differences in factor endowment, measured in GDP per capita, are negatively… Show more

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Cited by 11 publications
(9 citation statements)
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“…Similar to Caetano and Galego () and Jensen and Lüthje (), country size, income per capita differences and geographic distance appear as the most important driving forces of IIT in the NMS. Factor endowments, measured in two ways, are shown to be negatively related to VIIT, as Gabrisch () also showed. Our findings are also in line with those of Fainštein and Netšunajev (), analysing IIT patterns in the Baltic States and showing that market size was positively related to IIT, while a negative relationship between distance and share of IIT was found together with a negative correlation between differences in human capital and IIT.…”
Section: Resultsmentioning
confidence: 80%
See 1 more Smart Citation
“…Similar to Caetano and Galego () and Jensen and Lüthje (), country size, income per capita differences and geographic distance appear as the most important driving forces of IIT in the NMS. Factor endowments, measured in two ways, are shown to be negatively related to VIIT, as Gabrisch () also showed. Our findings are also in line with those of Fainštein and Netšunajev (), analysing IIT patterns in the Baltic States and showing that market size was positively related to IIT, while a negative relationship between distance and share of IIT was found together with a negative correlation between differences in human capital and IIT.…”
Section: Resultsmentioning
confidence: 80%
“…Gabrisch () looked at the determinants of VIIT between old and new Member States of the EU and found that country‐pair fixed effects were strongly significant in explaining VIIT. More concretely, technology differences were positively, while differences in factor endowment were negatively, correlated with VIIT.…”
Section: Empirical Evidencementioning
confidence: 99%
“…Furthermore, countries with a large income distribution overlap tended to have a large VIIT, while countries far from each other had a lower VIIT than the countries close to each other. Gabrisch (2009) was searching for the determinants of VIIT between the old and new member states of the EU and found the country-pair fixed effects to be of a high relevance for explaining the vertical intra-industry trade. More concretely, the technology differences were positively, while the differences in the factor endowment were negatively correlated with the vertical intra-industry trade.…”
Section: Empirical Evidencementioning
confidence: 99%
“…Furthermore, countries with large income distribution overlap tended to have a large VIIT, while countries far from each other had lower VIIT than those close to each other. Gabrisch (2009) found country-pair fi xed effects to be of high relevance for explaining VIIT between 'old' and 'new' EU Member States (EU-10). Technology differences were positively, while differences in factor endowment were negatively, correlated with VIIT.…”
Section: Country-and Industry-specifi C Determinants Of Intra-industrmentioning
confidence: 99%