CROATIAN INTRA-INDUSTRY TRADE - EMPIRICAL AND METHODOLOGICAL ANALYSIS

In view of the ongoing process of globalization and increasing economic integration, as well as imperfect competition and dynamic technological development, the issue of similarities in economic structures becomes crucial factor determining trade intensity among countries. Based on the new trade theory and regarding fundamental economic changes which took place in Central and East European countries during the 90s, the paper deals with Croatian intra-industry trade in comparison to other transition countries. The analysis shows that unlike new member countries of the EU, the smaller part of Croatian trade is of intra-industry type, i.e. there still dominates specialization according to traditional factor proportions theory. With such specialization pattern and a significant share of commodities of low level of technical sophistication it is difficult to expect significant positive effects of Croatian trade integration both on the world market and within regional economic integration in short-to-medium run.