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Industry-Specific Determinants of Intra-Industry Trade in India

Author

Listed:
  • C. Veeramani

    (Indira Gandhi Institute of Development Research, Mumbai, India)

Abstract

The paper analyses the industry-specific determinants of intra-industry trade (IIT) in Indian manufacturing industries. We find that the intensity of IIT would be larger if an industry is characterized by a greater degree of product differentiation. The intensity of IIT reduces if the spectrum of production activities in an industry is confined to few locations because of plant level scale economies. We find a negative relationship between IIT and the extent of multinational involvement, indicating that foreign direct investment replaces export sales of differentiated products to the host countries.

Suggested Citation

  • C. Veeramani, 2007. "Industry-Specific Determinants of Intra-Industry Trade in India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 42(2), pages 211-229, December.
    • Handle: RePEc:dse:indecr:v:42:y:2007:i:2:p:211-229
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    Citations

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    Cited by:

    1. Aggarwal, Sakshi, 2023. "The empirical measurement and determinants of intra-industry trade for a developing country," MPRA Paper 117112, University Library of Munich, Germany.
    2. Sakshi Aggarwal & Debashis Chakraborty & Nilanjan Banik, 2023. "Does Difference in Environmental Standard Influence India’s Bilateral IIT Flows? Evidence from GMM Results," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 22(1), pages 7-30, March.
    3. C.T. Vidya & K.P. Prabheesh, 2019. "Intra-Industry Trade Between India And Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 0(12th BMEB), pages 1-20, January.
    4. Priyanka Singh Bhadouria & N.M.P. Verma, 2012. "Intra-industry trade in textile industry: the case of India," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 199-212.
    5. Sakshi Aggarwal & Debashis Chakraborty, 2022. "Which Factors Influence India’s Intra-Industry Trade? Empirical Findings for Select Sectors," Global Business Review, International Management Institute, vol. 23(3), pages 729-755, June.
    6. Sumanpreet Kaur, 2019. "Business Cycle Synchronization for India: An Appraisal via Trade Intensity," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 22(72), pages 78-101, June.
    7. Aggarwal, Sakshi, 2023. "Intra-industry trade: Revisiting theory and Literature Survey," MPRA Paper 117182, University Library of Munich, Germany.
    8. Agarwal, Manmohan & Betai, Neha, 2021. "Intra-Industry Trade in Manufactured Goods: A Case of India," Working Papers 21/348, National Institute of Public Finance and Policy.
    9. Sagnik Bagchi & Surajit Bhattacharyya, 2021. "Industry-level determinants of India’s vertical and horizontal IIT," Indian Economic Review, Springer, vol. 56(1), pages 113-145, June.
    10. Bishwanath Goldar & Rashmi Banga, 2007. "Impact of Trade Liberalization on Foreign Direct Investment in Indian Industries," Working Papers 3607, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    11. Sakshi Aggarwal & Debashis Chakraborty, 2020. "Labour Market Adjustment and Intra-Industry Trade: Empirical Results from Indian Manufacturing Sectors," Journal of South Asian Development, , vol. 15(2), pages 238-269, August.
    12. Arora, Tarun, 2015. "Employment-Export Elasticities for the Indian Textile Industry," Working Papers 349, Institute for Social and Economic Change, Bangalore.

    More about this item

    Keywords

    Intra-Industry Trade; Industry-Specific Determinants; India;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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