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Export Variety And Intra-Industry Trade: Theoretical And Empirical Evidence

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  • Yoko Oguro

Abstract

This paper theoretically and empirically investigates the relationship between the number of product varieties and the extent of intra-industry trade (IIT). IIT provides more trade opportunities for countries in which differentiated products are produced. The model presented shows that the extent of bilateral IIT is higher the smaller the gap in the number of export varieties between two countries. The empirical analysis of Japan and twenty-five countries provides support for the theoretical model presented in this paper. The theory also shows that similar number of export varieties between two countries, that is, more IIT can be a tool to redress trade imbalance between two countries. The policy implication of the results is that promoting higher product variety will increase the opportunity for IIT regardless of country specific effects

Suggested Citation

  • Yoko Oguro, 2016. "Export Variety And Intra-Industry Trade: Theoretical And Empirical Evidence," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 10(3), pages 69-78.
    • Handle: RePEc:ibf:gjbres:v:10:y:2016:i:3:p:69-78
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    More about this item

    Keywords

    Export Variety; Trade; Intra-Industry Trade;
    All these keywords.

    JEL classification:

    • F00 - International Economics - - General - - - General
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F19 - International Economics - - Trade - - - Other

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