Munich Personal RePEc Archive

Vertical Intra-Industry Trade, Technology and Income Distribution: A Panel Data Analysis of EU Trade with Central-East European Countries

Gabrisch, Hubert (2009): Vertical Intra-Industry Trade, Technology and Income Distribution: A Panel Data Analysis of EU Trade with Central-East European Countries. Published in: Acta Oeconomica No. 1 (2009): pp. 1-22.

[img]
Preview
PDF
MPRA_paper_64181.PDF

Download (294kB) | Preview

Abstract

This article tests a Heckscher-Ohlin framework 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 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 correlated with vertical intra-industry trade, and confirm the relevance of the neo-Ricardian framework. In addition, changing bilateral differences in personal income distribution during the transition of Central-East European countries towards a market economy contribute to changes in vertical intra-industry trade.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.