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Keywords:

  • Food industry;
  • intra-industry trade;
  • labour market adjustment;
  • trade liberalisation
  • F19

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.