Country-Specific Determinants of Intra-Industry Trade in Clothing and Footwear between Poland and European Union Countries

Abstract

The present study investigated the country-specific determinants of intra-industry trade between Poland and its European Union trading partners in clothing and footwear during the time period 2004–2017. The econometric model for panel data was used to identify the factors determining bilateral intra-industry trade with EU countries. The research findings show that the size of the trading partners' economies has a positive impact on the development of intra-industry trade in clothing and footwear. The size of the country, measured by the size of its GDP, is equated with the size of the market and the possibilities of selling differentiated products in it. The geographical distance separating the trading countries turned out to be a factor limiting the development of intra-industry trade. An unfavourable effect on the intensity of intra-industry trade is also the degree of imbalance in trade between trade partners. The study confirmed that the direction of the impact of all determinants of intra-industry trade identified is consistent with the predictions of the theory.