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Intra-industry Trade and Innovation: An empirical study of the Colombian manufacturing industry

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  • Carlos Pombo

Abstract

This paper analyses the theoretical and empirical relationship between intra-industry trade (IIT) flows in manufactures and technical change for the Colombian manufacturing industry during the 1970-95 period. A general estimating equation for the sources of change of the equilibrium number of varieties, in which TFP growth is one of its components, is derived from the basic model of trade in differentiated goods with monopolistic competition. Based on that relationship, several estimations on the determinants of IIT flows are carried out. The econometric set up follows a panel data and cross-section estimations of system of simultaneous equations. TFP and IIT indices are the endogenous variables of the system with industry characteristic, trade policy, and innovation-activity variables as the set of exogenous variables. The paper also presents a comparative analysis in the direction and trends of Colombia's IIT flows in manufactures with the Group of Seven, NAFTA, and the Latin American Free Trade area members (LAFTA) since 1974.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal International Review of Applied Economics.

Volume (Year): 15 (2001)
Issue (Month): 1 ()
Pages: 77-106

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Handle: RePEc:taf:irapec:v:15:y:2001:i:1:p:77-106

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  1. Harrigan, James, 1996. "Openness to trade in manufactures in the OECD," Journal of International Economics, Elsevier, vol. 40(1-2), pages 23-39, February.
  2. James A. Brander & Paul Krugman, 1983. "A 'Reciprocal Dumping' Model of International Trade," NBER Working Papers 1194, National Bureau of Economic Research, Inc.
  3. Gianpaolo Rossini & Michele Burattoni, 1996. "Trade and convergence between rich and developing countries: Some empirical evidence on macrodeterminants of specialization," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 132(1), pages 75-96, March.
  4. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
  5. Helpman, Elhanan, 1981. "International trade in the presence of product differentiation, economies of scale and monopolistic competition : A Chamberlin-Heckscher-Ohlin approach," Journal of International Economics, Elsevier, vol. 11(3), pages 305-340, August.
  6. Leamer, Edward E. & Levinsohn, James, 1995. "International trade theory: The evidence," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 26, pages 1339-1394 Elsevier.
  7. Paul R. Krugman, 1985. "Increasing Returns and the Theory of International Trade," NBER Working Papers 1752, National Bureau of Economic Research, Inc.
  8. Joe Stone & Hyun-Hoon Lee, 1995. "Determinants of intra-industry trade: A longitudinal, cross-country analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 131(1), pages 67-85, March.
  9. Hummels, David & Levinsohn, James, 1995. "Monopolistic Competition and International Trade: Reconsidering the Evidence," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 799-836, August.
  10. Adolfo Meisel Roca & Carmen Helena Botero Arboleda, 1988. "Funciones De Oferta De Las Exportaciones Menores Colombianas," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE.
  11. Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 959-73, October.
  12. Steven Globerman & James Dean, 1990. "Recent trends in intra-industry trade and their implications for future trade liberalization," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 126(1), pages 25-49, March.
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Cited by:
  1. Carolina Caicedo Marulanda & Jhon James Mora Rodríguez, 2011. "Comercio intraindustrial Colombia-Estados Unidos. El caso de los bienes altamente tecnológicos," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID.

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