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European Integration, Intra-industry Trade in Vertically Differentiated Products and the Balkan Countries

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Abstract

The aim of this paper is to examine the relation between the integration process and the intensity of intra-industry trade between two countries of different levels of development. Our theoretical model and results indicate that trade liberalization and the establishment of the Free Trade Areas between the Balkan countries and the EC have led to the growth of the intra-industry trade between Greece—EC member state—and those countries. The main instruments of this process have been the Europe Agreements and the Stabilization and Association Agreements between the Balkan countries and the EC. The paper presents a model in vertically differentiated products in a Free Trade Area context and proceeds to depict the intensity of intra-industry trade between Greece and the Balkan countries.

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Acknowledgements

The authors gratefully acknowledge comments by Professor Thomas Moutos of Athens University of Economics. The authors are responsible for the remaining errors.

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Authors and Affiliations

  1. Department of Economics, Aristotelion University of Thessaloniki, P. O. Box 188, 54006, Thessaloniki, Greece

    Dimitri Mardas

  2. Department of Balkan Studies, University of Western Macedonia, Florinas-Nikis avenue, 53100, Florina, Greece

    Chistos Nikas

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  1. Dimitri Mardas
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  2. Chistos Nikas
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Correspondence to Dimitri Mardas.

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Mardas, D., Nikas, C. European Integration, Intra-industry Trade in Vertically Differentiated Products and the Balkan Countries. Int Adv Econ Res 14, 355–368 (2008). https://doi.org/10.1007/s11294-008-9164-9

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