Croatia's economic integration in EU's regional supply chains : panel data quantile regression

Background: Recent global disruptions have exposed the vulnerability of international supply chains, prompting a shift toward regionalization to enhance economic resilience. As a European Union (EU) member, Croatia has an opportunity to strengthen its integration into EU regional value chains (RVCs), fostering economic stability and competitiveness. This study examines Croatia's integration into EU RVCs and its economic impact. Methods: Using panel data from the UNCTAD-Eora database (2000-2019), this study applies panel data quantile regression (PDQR) to analyse Croatia's trade relationships with EU Member States. Unlike traditional regression models, PDQR captures variations in trade dynamics across different levels of economic activity, providing a more detailed understanding of Croatia's trade resilience. Results: The findings show that Croatia's trade integration strengthens at higher economic quantiles (τ = 0.75-0.85), reflecting its ability to scale exports during economic expansions. Lower quantiles (τ = 0.05-0.25) display stable but less dynamic trade patterns, suggesting a need for targeted policy interventions to enhance supply chain resilience. Strong trade linkages with Germany, Austria, Slovenia, Hungary, and Italy highlight Croatia's comparative advantage in high-value trade sectors. Conclusions: Croatia's integration into EU RVCs supports economic resilience and competitiveness. These findings provide insights for policymakers to optimize trade participation and mitigate vulnerabilities. By demonstrating the benefits of quantile-based trade analysis, this study advances the discourse on regional economic integration.