INTRA-INDUSTRY TRADE IN AGRI-FOOD PRODUCTS BETWEEN POLAND AND EUROPEAN UNION COUNTRIES

Abstract

The aim of this article is to elucidate intra-industry trade in agri-food products between Poland and other EU countries. This approach focuses on the analysis of Poland’s intra-industry trade with the integrative group and selected EU countries, distinguishing between horizontal and vertical intra-industry trade. It also identifies the countries with which Poland exports higher-quality product groups than it imports, and those to which it exports lower-quality agri-food products compared to the ones it imports. The Grubel-Lloyd index (IIT – intra-industry trade) is applied to calculate intra-industry trade. To differentiate between vertical and horizontal intra-industry trade, unit values are utilized, assuming that relative prices reflect relative characteristics, where horizontally differentiated products are homogeneous (perfect substitutes) and possess the same quality, while vertically differentiated products have varying prices reflecting different qualities. A division was also made into high vertical intra-industry trade, characterized by higher-quality exported products, and low vertical intra-industry trade, characterized by higher-quality imported products. The research findings indicate that Poland’s trade in agri-food products with EU countries predominantly exhibits characteristics of vertical intra-industry trade, with the quality of exported products generally surpassing that of imported ones.