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The Geography of Intra-Industry Trade

In: Frontiers of Research in Intra-Industry Trade

Author

Listed:
  • Mary Amiti
  • Anthony J. Venables

Abstract

One of the most robust empirical finds in the literature on intra-industry trade (IIT) is that measures of intra-industry trade relative to interindustry trade, such as the Grubel—Lloyd index, decline with distance. The objective of this chapter is to investigate why relative intra-industry trade (RIIT) declines in this way. There are two quite distinct ways in which this decline could arise. The first is that there are differences in the nature of the trading process that make IIT attenuate more rapidly with distance than do other forms of trade. For example, products in which IIT is important may also be products where shipping costs are particularly high, so RIIT measures decline with distance. Alternatively, industry may locate in such a way that neighbouring countries produce a similar mix of products, in which case IIT will be higher on shortrather than long-distance trades. Then, even if the trading process is the same for all products, the data may show a systematic relationship between RIIT and distance.

Suggested Citation

  • Mary Amiti & Anthony J. Venables, 2002. "The Geography of Intra-Industry Trade," Palgrave Macmillan Books, in: P. J. Lloyd & Hyun-Hoon Lee (ed.), Frontiers of Research in Intra-Industry Trade, chapter 6, pages 87-106, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-28598-9_6
    DOI: 10.1057/9780230285989_6
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    Citations

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    Cited by:

    1. Janet Koech & Mark A. Wynne, 2017. "Diversification and Specialization of U.S. States," The Review of Regional Studies, Southern Regional Science Association, vol. 47(1), pages 63-91, Winter.
    2. repec:kap:iaecre:v:14:y:2008:i:4:p:355-368 is not listed on IDEAS
    3. Kyoji Fukao; Toshihiro Okubo, 2004. "Why Has the Border Effect in the Japanese Market Declined?," IHEID Working Papers 12-2004, Economics Section, The Graduate Institute of International Studies.
    4. Toshihiro Okubo, 2004. "Intra-industry Trade and Production Networks," IHEID Working Papers 13-2004, Economics Section, The Graduate Institute of International Studies.
    5. Aleksandra Parteka & Massimo Tamberi, 2013. "What Determines Export Diversification in the Development Process? Empirical Assessment," The World Economy, Wiley Blackwell, vol. 36(6), pages 807-826, June.
    6. Venables Anthony J. & Rice Patricia G. & Stewart Martin, 2003. "The Geography of Intra-Industry Trade: empirics," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-25, September.
    7. Dimitri Mardas & Chistos Nikas, 2008. "European Integration, Intra-industry Trade in Vertically Differentiated Products and the Balkan Countries," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 14(4), pages 355-368, November.
    8. Marius Brülhart, 2009. "An Account of Global Intra‐industry Trade, 1962–2006," The World Economy, Wiley Blackwell, vol. 32(3), pages 401-459, March.
    9. Toshihiro Okubo, 2007. "Intra‐industry Trade, Reconsidered: The Role of Technology Transfer and Foreign Direct Investment," The World Economy, Wiley Blackwell, vol. 30(12), pages 1855-1876, December.
    10. Kwanho Shin & Yunjong Wang, 2003. "Monetary Integration Ahead of Trade Integration in East Asia?," ISER Discussion Paper 0572, Institute of Social and Economic Research, Osaka University.

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