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An Analysis of Bilateral Intra-Industry Trade in the Food Processing Sector

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  • Hirschberg, Joseph G.
  • Sheldon, Ian M.
  • Dayton, James R.

Abstract

This paper analyzes determinants of intra-industry trade in food processing for a thirty country sample over the period 1964-1985. Previous studies have tested the hypothesis that imperfect competition is a major determinant of intra-industry trade (UT) in the durable goods manufacturing sectors. This study is distinguished. from the earlier studies of ITT by; the examination of the processed food sector (SIC=20), the use of a panel data set for 22 years and 30 countries available at the four digit SIC level, the use of purchasing power parity measures of GDP, and the use of a weighted tobit model with fixed effects to account for the censored cross-section time-series nature of the data. The results indicate that such trade is a positive function of a county's GDP per capita and equality of GDP per capita between countries. In addition, it is also found that a large proportion of this trade is between countries that share common borders and between countries within the European Community.

Suggested Citation

  • Hirschberg, Joseph G. & Sheldon, Ian M. & Dayton, James R., 1992. "An Analysis of Bilateral Intra-Industry Trade in the Food Processing Sector," Occasional Papers 233083, Regional Research Project NC-194: Organization and Performance of World Food Systems.
    • Handle: RePEc:ags:nc194o:233083
    DOI: 10.22004/ag.econ.233083
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    References listed on IDEAS

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    1. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    2. Balassa, Bela & Bauwens, Luc, 1987. "Intra-industry Specialisation in a Multi-country and Multi-industry Framework," Economic Journal, Royal Economic Society, vol. 97(388), pages 923-939, December.
    3. Steve McCorriston & Ian M. Sheldon, 1991. "Intra-Industry Trade and Specialization in Processed Agricultural Products: The Case of the US and the EC," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 13(2), pages 173-184.
    4. Bergstrand, Jeffrey H, 1990. "The Heckscher-Ohlin-Samuelson Model, the Linder Hypothesis and the Determinants of Bilateral Intra-industry Trade," Economic Journal, Royal Economic Society, vol. 100(403), pages 1216-1229, December.
    5. Hart, Tracy & McDonald, Bradley J., 1992. "Intra-Industry Trade Indexes for Canada, Mexico, and the United States, 1962-87," Staff Reports 278619, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Hartman, Darcy A. & Henderson, Dennis R. & Sheldon, Ian M., 1992. "A Cross-Section Analysis of Multilateral Intra-Industry Trade in the U.S. Processed Food and Beverage Sectors," Occasional Papers 233086, Regional Research Project NC-194: Organization and Performance of World Food Systems.
    2. Hartman, Darcy A. & Henderson, Dennis R. & Sheldon, Ian M., 1993. "A Cross-Section Analysis Of The Intra-Industry Trade In The U.S. Processed Food And Beverage Sectors," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 22(2), pages 1-10, October.
    3. Bashir A. Qasmi & Scott W. Fausti, 2001. "NAFTA intra-industry trade in agricultural food products," Agribusiness, John Wiley & Sons, Ltd., vol. 17(2), pages 255-271.
    4. Imre Ferto & Lionel J. Hubbard, 2001. "Intra-Industry Trade in Agri-Food Products between Hungary and EU," CERS-IE WORKING PAPERS 0106, Institute of Economics, Centre for Economic and Regional Studies.
    5. Handy, Charles R., 1993. "U.S. Foreign Investment and Trade Prospects in Mexico's Agribusiness," Occasional Papers 233160, Regional Research Project NC-194: Organization and Performance of World Food Systems.
    6. Chang, Ching-Cheng & Yang, Tuan-Chen Ou & Huang, Deng-Shing, 2001. "Intra-Industry Trade Between Taiwan And Asean-5 In The Agro-Food Sector: Patterns And Determinants," 2001 Annual meeting, August 5-8, Chicago, IL 20601, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Fertő, Imre & Hubbard, Lionel J., 2003. "A vertikálisan és horizontálisan differenciált mezőgazdasági termékek ágazaton belüli kereskedelme Magyarország és az Európai Unió Között [Intra-industry trade in vertically and horizontally differ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 152-163.
    8. Haq, Zahoor Ul & Meilke, Karl D., 2008. "Differentiated Agri-Food Product Trade and the Linder Effect," Working Papers 46629, Canadian Agricultural Trade Policy Research Network.
    9. Chemsripong, S. & Lee, J.E. & Agbola, F.W., 2005. "Intra-Industry Trade in Manufactures Between Thailand and Other Asia Pacific Economic Cooperation (APEC), Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 5(4).
    10. Bruno Henry de Frahan & Patricia Libert, 1996. "Le commerce intra-banche dans l'industrie agro-alimentaire européenne. Une nouvelle forme de globalisation," Économie rurale, Programme National Persée, vol. 234(1), pages 78-88.
    11. Levkovych, Inna, 2011. "Der ukrainische Außenhandel mit Produkten der Agrar- und Ernährungswirtschaft: Eine quantitative Analyse aus Sicht traditioneller und neuer Außenhandelstheorien," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 59, number 109520.
    12. Frahan, Bruno Henry de & Tharakan, Joe, 1998. "Horizontal And Vertical Intra-Industry Trade In The Processed Food Sector," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20903, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. van Berkum, Siemen & van Meijl, Hans, 2000. "The application of trade and growth theories to agriculture: a survey," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(4), pages 1-38.
    14. Fertő, Imre & Hubbard, Lionel J., 2001. "A mezőgazdasági termékek ágazaton belüli kereskedelme. Magyarország és az Európai Unió között [Intra-industry trade in agricultural products between Hungary and the European Union]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 766-778.

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    Agricultural and Food Policy;

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