No abstract

Although research of intra-industry trade (IIT) has been intensive in the last several decades, the empirical literature focusing on this phenomenon in the Western Balkans countries remains limited, especially in agricultural sector. Aiming to contribute to the existing literature, the paper analyses patterns and country-specific determinants of IIT in agri-food products between Bosnia and Herzegovina (BiH) and the European Union (EU) during the period of their mutual trade liberalisation (2008-2018). The analysis employs Grubel-Lloyd indices and Greenaway-Hine-Milner methodology for measurement of IIT, and applies an econometric panel data model using a Poisson Pseudo-maximum likelihood approach in order to estimate effects of IIT determinants. The findings suggest that intra-industry agri-food trade of BiH with the EU is of low intensity and mainly of vertical nature, viewed totally and bilaterally. We found significant positive effects of trading countries’ sizes, common border and history on IIT, and negative effects of the geographic distance and differences in agricultural productivity.

A country's trade pattern reflects its supply (export) and demand (import) specialization indicating national performance and competitiveness in the foreign as well as in the domestic market. By applying two different concepts of trade specialization (one based on traditional trade theories of comparative advantages and the other based on modern trade theories), complemented with the analysis of export-import flows and relations, the paper aims to identify characteristics of the position of Bosnia and Herzegovina (B&H) in its bilateral trade. The paper investigates trends, patterns and variations in the trade of B&H with Turkey during the eleven-year time frame (2009-2019), with special regard to identifying industries with revealed comparative advantages and industries with dominancy of IIT. The analysis employs different indicators such as indices of export composition, sectoral diversification/concentration, IIT intensity and structure, quality of exports and imports based on relative unit values and classification of industries by technological intensity. The research results indicated an unfavourable position of B&H in trade with Turkey, with no prominent changes in the observed period. The trade deficit is constantly present, with low export-import coverage and a declining export trend. The analysis revealed a higher level of export product concentration primarily on low value added products, and comparative advantages of B&H in fewer industries, mainly resource-based or medium-technologically intensive. Trade with Turkey is extremely inter-industry trade, viewed both at an aggregate and industrial level, also pointing to B&H's low competitiveness in analyzed trade relations.

The paper focuses primarily on intra-industry trade (IIT) which is researched in the context of country-specific characteristics. A three-decade-long academic research of IIT phenomena suggests that IIT is likely to be more intensive and mostly of horizontal type between countries that are at a similar stage of economic development, with the same level of trade openness and with intensive and significantly liberalized mutual trade. Geographical proximity of countries, especially their common border, as well as their similarities in some non-economic characteristics such as history, culture, language, also contribute to IIT intensity. Bosnia and Herzegovina (BH) and Croatia match most of these criteria for intensive and increasing IIT. The aim of the research is to check aforementioned thesis on IIT on a case study of BH in its trade with Croatia over the period from 2003 till 2016. Research is focused on IIT characteristics-intensity, trend and structure, both at aggregate level (based on calculating corrected and uncorrected Grubel-Lloyd indices) and at division level of Standard International Trade Classification-SITC (based on calculating standard Grubel-Lloyd index and relative unit values of export and import). The research findings indicate a continuously rising, although lower than expected, intensity of IIT, taking into account similarities between given countries in comparison with other important trading partners of BH and taking into account a high level of data aggregation. In BH trade with Croatia inter-industry trade still prevails while high intensive IIT appears in a very low number of product groups, coupled with the dominance of vertical IIT. However,at the same time a growing trend and a significant increase of IIT intensity in trade with Croatia have been identified.