INTEGRATION OF POLAND’S REGIONS WITH THE EUROPEAN UNION – ASSESSMENT OF INTRA INDUSTRY TRADE RELATIONS

Abstract

The purpose of the study is to present and assess international trade relations of Poland’s regions, with focus on the intensity of intra industry trade (IIT) with the EU countries. This kind of trade is treated as a measure of integration of Poland’s region’s economies with the EU market. The particular tasks addressed in the paper are: description of inspirations to deal with international trade at regional level; formulation of a concept of region as a small, open economy; assessment of intra industry trade links in static and marginal formula - at regional level for Poland’s regions. The proposed approach is a novelty in both ways: (a) studies on international trade for Poland’s regions are not so much developed; (b) intra-industry trade at regional level is a new topic that sheds light on real integration with the EU markets. The method used in the research is a standard formula of IIT as proposed by Grubell and Lloyd, weighted according to product’s shares in trade volume. Also the marginal IIT formula is used, as proposed by M. Brülhart. Calculations were done for four-digit Combined Nomenclature groups of products. As expected, intensity of IIT for regions is lower than for the whole country. There are important differences observed for Poland’s regions. As regions differ per se, also in terms of IIT one observes differences that reflect: proximity to the EU internal market, GDP per capita differences, role of foreign direct investments in region’s economies, structure of industry and exports as well as overall competitiveness. Five groups of countries have been distinguished. IIT intensity is the highest for relations with “the old“ EU member states. Also for the “new“ member states is relatively high. It corresponds to the main message of IIT theory, that predicts stronger IIT among integrated economies. DOI: http://dx.doi.org/10.5755/j01.eis.0.8.6770