**6. Conclusions**

The integration of markets and the equalization of prices in EU countries is one of the main objectives of the Common Agricultural Policy. This paper evaluates the processes of spatial integration in the market of milk and dairy products between Poland and the

Czech Republic. Among other things, the countries share a long history of trade in dairy products, proximity, and the same moment of accession to the EU.

To achieve the aim of the paper, methods of evaluating spatial integration processes based on trade flows and prices were used. The analysis was conducted for a 21-year period at the national level and a 9-year period at the regional level. Four markets were selected for analysis: raw milk, butter, SMP, and Edam cheese.

Based on the research conducted, it can be noted that: (1) on the basis of the results of trade flows, one would have to conclude that the Czech Republic and Poland are characterized by a long range of linkages, which is a strong indication of the integration of these two markets for all analyzed products; (2) based on the analysis of price differences, in most cases, the prices of dairy products in the Czech Republic were higher than the prices of these products in Poland; the smallest differences were found in the prices of SMP (on average −0.6%), and the highest differences were found in the prices of milk (on average −2.0%); (3) a long-run price relationship between the Czech Republic and Poland was confirmed by the Johansen cointegration test for milk and SMP only; (4) in the light of the Granger test performed for milk, butter, and Edam cheese prices, there was a two-way causality, while in the case of SMP prices, only future SMP prices in Poland were the cause, in the Granger sense, of future SMP prices in the Czech Republic; (5) despite the long-run relationship of milk prices at the national level, in the case of regional analysis, for only half of the analyzed pairs of Czech and Polish regions was such a relationship also long-run; in the case of the Czech Republic, these were the regions closest to Poland, which, thus, confirmed the importance of distance. In the case of Poland, the highest number of long-run linkages was obtained by regions specializing in milk production; (6) the results of the study confirmed that the factors influencing the spatial price relationships between the Czech Republic and Poland are: strong trade ties, a common moment of accession to the EU, a close distance between markets, and region specialization.

Despite meeting the purpose of the article, it should also be noted that our study is not without limitations. In such analyses, the length of the time series matters; an analysis using weekly data of product prices would even more effectively estimate linkages. Despite some limitations, our study provides an interesting starting point for future research. The methodology used in this article can be replicated and evaluated for the phenomenon being studied in another few years. Another suggestion would be to use nonlinear models to assess spatial integration processes between the two markets, as well as regional analysis for other separate markets.

**Author Contributions:** Conceptualization, M.R. and Z.Ž.K.; methodology, M.R.; software, M.R.; validation, M.R.; formal analysis, M.R.; investigation, M.R. and Z.Ž.K.; resources, M.R. and Z.Ž.K.; data curation, M.R. and Z.Ž.K.; writing—original draft preparation, M.R. and Z.Ž.K.; writing— review and editing, M.R. and Z.Ž.K.; visualization, M.R.; supervision, M.R.; project administration, M.R.; funding acquisition, M.R. All authors have read and agreed to the published version of the manuscript.

**Funding:** This research was funded by POLISH NATIONAL AGENCY FOR ACADEMIC EX-CHANGE gran<sup>t</sup> number PPN/BIL/2020/1/00221.

**Institutional Review Board Statement:** Not applicable.

**Informed Consent Statement:** Not applicable.

**Data Availability Statement:** Not applicable.

**Conflicts of Interest:** The authors declare no conflict of interest.
