Labour Market Adjustment and Intra-Industry Trade: The Effects of Association on the Hungarian Food Industry

Authors

  • Imre Ferto

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      Imre Ferto is based in the Institute of Economics, Budaorsi ut 45, Budapest H-1112, Hungary and the Department of Agricultural Economics and Rural Development, Corvinus University of Budapest, Hungary. E-mail: ferto@econ.core.hu for correspondence. The author thanks two anonymous reviewers and the editors of the JAE for comments on earlier drafts and also gratefully acknowledges financial support from the Hungarian Scientific Research Fund No. 37868 ‘The International Agricultural Trade: Theory and Practice’.


Abstract

The structure of Hungary’s food trade expansion over the period 1995–2003 and its implications for labour market adjustment are examined. The contributions of the paper are threefold. First, we test the sensitivity of results to the choice of measurement and their implications for the results. Second, we introduce more industry-specific control variables. Third, we distinguish the short- and long-run adjustment effects. Our results provide some support for the smooth-adjustment hypothesis of intra-industry trade. Estimations confirm that industry-specific variables may have a significant effect on adjustment costs.

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