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The Volume of Trade in Differentiated Intermediate Goods: Theory and Evidence

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  • Harrigan, James

Abstract

This paper develops a model of trade in differentiated intermediate goods and shows how the structure of the importing country's production will influence gross bilateral import volumes. A regression equation directly implied by the model is estimated using disaggregated bilateral trade data for the OECD countries in 1985. The data reject the model. A more general model suggested by the theory establishes strong links between a country's factor endowments and its gross trade volume. This model is dominated statistically by a fixed effects model and does not substantially alter the conclusions of earlier empirical studies about openness to trade in manufactured goods. Copyright 1995 by MIT Press.

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Bibliographic Info

Article provided by MIT Press in its journal Review of Economics & Statistics.

Volume (Year): 77 (1995)
Issue (Month): 2 (May)
Pages: 283-93

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Handle: RePEc:tpr:restat:v:77:y:1995:i:2:p:283-93

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Web page: http://mitpress.mit.edu/journals/

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Cited by:
  1. Horácio Faustino & Nuno Leitão, 2007. "Intra-Industry Trade: A Static and Dynamic Panel Data Analysis," International Advances in Economic Research, Springer, vol. 13(3), pages 313-333, August.
  2. Kemal Turkcan, 2005. "Determinants of Intra-Industry Trade in Final Goods and Intermediate Goods between Turkey and Selected OECD Countries," Istanbul University Econometrics and Statistics e-Journal, Department of Econometrics, Faculty of Economics, Istanbul University, vol. 1(1), pages 21-40, May.
  3. Horácio Faustino & Nuno Carlos Leitão, 2005. "The Intra Industry Trade between Portugal European Union, Portugal Spain, Portugal-France, Portugal Germany, Portugal-Ireland, Portugal-Greece and Portugal-Netherlands - a Dynamic Panel Data Analysis ," ERSA conference papers ersa05p23, European Regional Science Association.
  4. Rod Tyers & Qun Shi, 2007. "Demographic Change and Policy Responses: Implications for the Global Economy," The World Economy, Wiley Blackwell, vol. 30(4), pages 537-566, 04.
  5. Bernard Fingleton & Miguel Gómez-Antonio, 2009. "Analysing the Impact of Public Capital Stock Using the NEG Wage Equation: A Panel Data Approach," SERC Discussion Papers 0024, Spatial Economics Research Centre, LSE.
  6. Horácio C. Faustino & Nuno C. Leitão, 2006. "Portuguese Intra-Industry Trade: A Dynamic Panel Data Analysis," Working Papers Department of Economics 2006/21, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  7. Edward E. Leamer & James Levinsohn, 1994. "International Trade Theory: The Evidence," NBER Working Papers 4940, National Bureau of Economic Research, Inc.
  8. Irac, D., 2008. "Access to new imported varieties and total factor productivity: Firm level evidence from France," Working papers 204, Banque de France.
  9. Russell Hillberry & David Hummels, 2002. "Explaining Home Bias in Consumption: The Role of Intermediate Input Trade," NBER Working Papers 9020, National Bureau of Economic Research, Inc.
  10. Rod Tyers & Jane Golley, 2006. "China's Growth to 2030: The Roles of Demographic Change and Investment Risk," ANU Working Papers in Economics and Econometrics 2006-461, Australian National University, College of Business and Economics, School of Economics.
  11. Rod Tyers & Jane Golley, 2006. "China's Growth to 2030: The Roles of Demographic Change and Investment Premia," PGDA Working Papers 1206, Program on the Global Demography of Aging.
  12. Russell Hillberry & David Hummels, 2005. "Trade Responses to Geographic Frictions: A Decomposition Using Micro-Data," NBER Working Papers 11339, National Bureau of Economic Research, Inc.
  13. Aturupane, Chonira & Djankov, Simeon & Hoekman, Bernard, 1997. "Determinants of intra-industry trade between East and West Europe," Policy Research Working Paper Series 1850, The World Bank.
  14. Chonira Aturupane & Simeon Djankov & Bernard Hoekman, 1999. "Horizontal and vertical intra-industry trade between Eastern Europe and the European union," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(1), pages 62-81, March.
  15. Rod Tyers & Qun Shi, 2006. "Global Demographic Change, Labour Force Growth and Economic Performance," ANU Working Papers in Economics and Econometrics 2006-462, Australian National University, College of Business and Economics, School of Economics.
  16. Richard Frensch, 2010. "European trade in parts and components : searching (for a trade model for searching) for offshoring evidence," Working Papers 280, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).

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