INTRA-INDUSTRY TRADE AND EXPORT SPECIALIZATION: LITHUANIAN CASE

Abstract

This paper investigates the extent of intra-industry trade between Lithuania and the European Union and its role in export specialization.

Lithuanian integration into the EU had an influence on the changes of intra-industry trade and export structure. The paper analyses the basic methods of intra-industry trade and export specialization measurement; the pattern of intra-industry trade between Lithuania and the EU, the influence of this form of trade on the changes of export structure. For measurement of Lithuanian intra-industry trade in the paper two approaches are adopted. The Grubel-Lloy index is used to calculate the intensity of intra-industry trade and thus to determine its relative importance compared to inter-industry trade. Secondly, the changes in trade over time are examined using an index of marginal intra-industry trade. Using these methods of measurement and Combined Nomenclature of commodities (CN) are calculated that Lithuania export specialization is based on similar goods with relatively different quality. It was determined that Lithuania has advantages in such CN groups as milk, fish products and other products. The EU has advantages in trade of product fruit, vegetables, coffee and other products.