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.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Vertical intra-industry trade, factor endowment, technology, income distribution, transition, Central-East European countries
• Subjects: F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F1 - Trade > F15 - Economic Integration

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