Patterns of Intra-Industry Trade in Agricultural and Food Products During Transition

Abstract

Pelzman (1977, 1978) was the first to investigate the question of intraindustry specialization among the former centrally planned economies. Unlike West European countries where intra-industry specialization was found to prevail in trade flows (Balassa 1966; Grubel and Lloyd 1975), trade between centrally planned economies was generally not characterized by intra-industry specialization. Drabek and Greenaway (1984) found that average levels of intra-industry trade (IIT) tend to be higher in integrating market economies than in centrally planned ones. With transition to a market economy and the resultant trade liberalization, the trading patterns of transition economies have changed. Smith (1994), and Brenton and Gros (1997) argued that the break-up of former Central and East European countries' (CEECs) trade flows and payment mechanisms at first had a negative impact on output and trade. The magnitude of the output and the trade decline varied across individual CEECs (Brenton and Gros 1997; Macours and Swinnen 2000). Hughes and Hare (1991, 1992, 1994), Gacs (1994), Landesmann (1994), and