HORIZONTAL AND VERTICAL SPECIALIZATION IN THE INTERNATIONAL MERCHANDIZE TRADE: THE CASE OF CROATIA AND THE CZECH REPUBLIC

This paper examines horizontal and vertical intra-industry trade specialization in the international merchandize trade in Croatia and the Czech Republic. The work is oriented toward the role and contribution of individual product groups in total trade patterns. The analysis is made using k-means cluster method. The RCA indicator, GL index and RUV indicator are used as variables and product groups at the three-digit level of the SITC as objects. In Croatian intra-industry trade vertical specialization is dominant, as well as low quality export. Croatia has high quality export in trade with tobacco products, pharma-ceutical and medicinal products, some textile products and fi sh products. The shipbuil-ding industry, that has the greatest share in Croatian export, has horizontal specialization. The most important low quality export products are the great majority of food products and wood products. Compared to Croatia, in intra-industry trade of the Czech Republic, horizontal specialization is dominant, as well as vertical specialization with high quality export.