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Determinants Of South Africa‐Us Intra‐Industry Trade In Services: A Wild Bootstrap Dynamic Panel Data Analysis1

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  • Moses Muse Sichei
  • Chris Harmse
  • Frans Kanfer

Abstract

The study attempts to empirically identify factors that determine South Africa–US intra‐industry trade (IIT) in selected services during the period 1994‐2002. The study utilises Liu‐Davidson‐Flachaire wild bootstrap, which is robust to heteroscedasticity and provides estimates of the degree of parameter bias. The empirical results, in principle, show that South Africa–US IIT in the selected services is determined by factors similar to goods‐based “North‐South” IIT studies. Specifically, differences in per capita income and differences in market size negatively affect IIT. The study also indicates that US foreign direct investment in South Africa positively contributes to the unaffiliated IIT in services.

Suggested Citation

  • Moses Muse Sichei & Chris Harmse & Frans Kanfer, 2007. "Determinants Of South Africa‐Us Intra‐Industry Trade In Services: A Wild Bootstrap Dynamic Panel Data Analysis1," South African Journal of Economics, Economic Society of South Africa, vol. 75(3), pages 521-539, September.
    • Handle: RePEc:bla:sajeco:v:75:y:2007:i:3:p:521-539
    DOI: 10.1111/j.1813-6982.2007.00136.x
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    References listed on IDEAS

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    1. Moshirian, Fariborz & Li, Donghui & Sim, Ah-Boon, 2005. "Intra-industry trade in financial services," Journal of International Money and Finance, Elsevier, vol. 24(7), pages 1090-1107, November.
    2. Davidson, Russell & Flachaire, Emmanuel, 2008. "The wild bootstrap, tamed at last," Journal of Econometrics, Elsevier, vol. 146(1), pages 162-169, September.
    3. Michael Kunin & Kresimir Zigic, 2004. "Strategic Trade Policy and Vertical Product Differentiation: intra-industry trade between developed and developing countries," CERGE-EI Working Papers wp230, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    4. G. Everaert & L. Pozzi, 2004. "Bootstrap Based Bias Correction for Homogeneous Dynamic²² Panels," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 04/263, Ghent University, Faculty of Economics and Business Administration.
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    1. Andrew Ojede, 2015. "Exchange Rate Shocks and U.S. Services and Agricultural Exports: Which Export Sector is More Affected?," The International Trade Journal, Taylor & Francis Journals, vol. 29(3), pages 228-250, August.
    2. Haider Mahmood & Tarek Tawfik Yousef Alkhateeb & Tarek Tawfik Yousef Alkhateeb, 2017. "Testing Asymmetrical Effect of Exchange Rate on Saudi Service Sector Trade: A Non-linear Auto-regressive Distributive Lag Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 73-77.

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