EFFECTS OF EU ACCESSION ON INTRA-INDUSTRY AGRICULTURAL TRADE BETWEEN HUNGARY AND EU15

The evidence of intra-industry trade (IIT) is one of the most important empirical findings in international trade literature, though its empirical background is poorly developed. The article contributes to the empirical literature by analysing the effects of EU accession on intra-industry trade by using the Grubel-Lloyd index. Results show that agricultural trade between Hungary and EU15 in 2000-2007 was dominantly inter-industry in nature but it becomes more and more intra-industrial, meaning that trade of products created by different industries is replaced by that of created by the same industry. The article suggests three important effects of changes in Hungarian agricultural trade after EU accession: (a) increase in specialisation, (b) changing product quality and (c) changing product prices.