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Intra-industry trade in the wine sector in the enlarged European Union

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Abstract

International trade theory suggests that advanced trade integration may lead to a higher level of intra-industry trade. The enlargement of the European Union (EU) during the last decade is a good example to analyse the intra-industry trade in wine products. The aim of the paper is to analyse the pattern and drivers of horizontal intra-industry trade in the wine sector within the EU between 2000 and 2011. We employ an empirical strategy developed by Cieślik (2005) to test Helpman and Krugman (1985) model. We find a growing trend in intra-industry trade with dominance of vertical intra-industry trade. Estimations suggest that Belgium, France, the Netherlands and Germany report the highest level of intra-industry trade within the EU. The level of intra-industry trade is highest among old member states. Empirical evidence indicates that the standard intra-industry theory finds some support in our data when we control for the sum of capital to labour ratios in the estimated equations instead of relative country-size variables. We find that the EU enlargement positively influences total and vertical intra-industry trade while it has negative impacts on horizontal intra-industry trade. Distance has negative effects on all types of intra-industry trade.

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Acknowledgments

The authors gratefully acknowledge two anonymous referees for their helpful comments and suggestions on earlier drafts of this manuscript. This research was supported by the project NKFI-115788 “Economic crises and international agricultural trade”.

Author information

Authors and Affiliations

  1. Center for Economic and Regional Study, Corvinus University of Budapest, University of Kaposvár, Kaposvár, Hungary

    Imre Fertő

  2. Corvinus University of Budapest, Budapest, Hungary

    Szilárd Podruzsik & Jeremiás Balogh

Authors
  1. Imre Fertő
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  2. Szilárd Podruzsik
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  3. Jeremiás Balogh
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Corresponding author

Correspondence to Szilárd Podruzsik.

Appendix

Appendix

Specification tests for Table 4 (p values)

 

IIT

Horizontal IIT

Vertical IIT

IIT

Horizontal IIT

VerticalIIT

Hausman test

0.0213

0.3562

0.0165

0.0315

0.8364

0.0415

Wooldridge test for autocorrelation in panel data

0.0000

0.9092

0.0000

0.0000

0.9075

0.0000

Modified Wald test for groupwise heteroscedasticity

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

Pesaran’s test of cross-sectional independence

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

Specification tests for Table 5 (p values)

 

IIT

Horizontal IIT

Vertical IIT

IIT

Horizontal IIT

VerticalIIT

Hausman test

0.5527

0.2026

0.2158

0.4989

0.9235

0.3338

Wooldridge test for autocorrelation in panel data

0.0000

0.9083

0.0000

0.0000

0.9072

0.0000

Modified Wald test for groupwise heteroscedasticity

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

Pesaran’s test of cross-sectional independence

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

Specification tests for Table 6 (p values)

 

IIT

Horizontal IIT

Vertical IIT

IIT

Horizontal IIT

Vertical IIT

Hausman test

0.1749

0.0011

0.5691

0.0226

0.0176

0.0715

Wooldridge test for autocorrelation in panel data

0.0000

0.9101

0.0000

0.0000

0.9086

0.0000

Modified Wald test for groupwise heteroscedasticity

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

Pesaran’s test of cross-sectional independence

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

Specification tests for Table 7 (p values)

 

IIT

Horizontal IIT

Vertical IIT

IIT

Horizontal IIT

Vertical IIT

Hausman test

0.2345

0.0069

0.5169

0.0650

0.1012

0.1400

Wooldridge test for autocorrelation in panel data

0.0000

0.9102

0.0000

0.0000

0.9088

0.0000

Modified Wald test for groupwise heteroscedasticity

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

Pesaran’s test of cross-sectional independence

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

Specification tests for Table 8 (p values)

 

IIT

Horizontal IIT

Vertical IIT

IIT

Horizontal IIT

Vertical IIT

Hausman test

0.9234

0.0076

0.9900

0.6873

0.1550

0.6660

Wooldridge test for autocorrelation in panel data

0.0000

0.9094

0.0000

0.0000

0.9085

0.0000

Modified Wald test for groupwise heteroscedasticity

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

Pesaran’s test of cross-sectional independence

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

Specification tests for Table 9 (p values)

 

IIT

Horizontal IIT

Vertical IIT

IIT

Horizontal IIT

Vertical IIT

Hausman test

0.3355

0.0006

0.4783

0.0335

0.0071

0.0548

Wooldridge test for autocorrelation in panel data

0.0000

0.9109

0.0000

0.0000

0.9094

0.0000

Modified Wald test for groupwise heteroscedasticity

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

Pesaran’s test of cross-sectional independence

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

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Fertő, I., Podruzsik, S. & Balogh, J. Intra-industry trade in the wine sector in the enlarged European Union. Rev Agric Food Environ Stud 97, 159–172 (2016). https://doi.org/10.1007/s41130-016-0024-3

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  • DOI: https://doi.org/10.1007/s41130-016-0024-3

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