Intra-Industry Trade in Agricultural Products at Intra-EC Level: The Impact of the Common Agricultural Policy (CAP) Funds
Agricultural Economics Review, Vol. 12, Issue 2, 16-29, 2011
Posted: 6 Jan 2013
Date Written: 2011
This paper aims at specifying the main determinants of the intra-industry trade in agricultural products, associated with the funds of the Common Agricultural Policy (CAP) of the EC, and more precisely, with its “price support mechanism” and its “structural reform policy.” It presents CAP’s reformed main tools and mechanisms, and explains the choice of selected variables as determinants of intra-industry trade in agricultural products at intra-EC trade. The econometric analysis covers the period 1973-2005, following recent developments in time-series analysis employing the ARDL approach to cointegration. The empirical results provide evidence of Granger causal effects in both on short-run and long-run horizon running from CAP’s above mentioned policy tools to intra-industry trade.
Keywords: Common Agricultural Policy (CAP), Economic Integration, Intraindustry Trade
JEL Classification: Q17, F15, C32
Suggested Citation: Suggested Citation