HOW MUCH OF THE CROATIAN FOREIGN TRADE IS OF AN INTRA-INDUSTRY TYPE?

Intra-industry trade represents the trade of products within the same industry in a two way direction and it is more intensive between developed countries. Intra-industry trade is higher between the countries which are at the similar development level, geographically
closed, while the trade between developed and less developed countries is mostly inter-industry. There is a characteristic for the transition countries of the rising trend of intra-industry trade with the European Union but, at the same time, it isn’t a case for the
Croatian trade pattern. Croatian international trade faces with decreasing intra-industry trade and diminishing GL index. The analysis also confi rms the dominance of vertical IIT, that consists of trade in similar good, but of different quality. This characteristic reflects the unfavorable structure of IIT between Croatia and the European Union. The obtained results also show the same conclusion for Croatian trade with Slovenia, while the trade with Bosnia and Hercegovina is inter-industry.