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Asymmetric Pattern Of Intra-Industry Trade Between The United States And Canada

Author

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  • Kim, MinKyoung
  • Cho, Guedae
  • Koo, Won W.

Abstract

This study proposes alternative rationales to explain an asymmetric intra-industry trade pattern between the United States and Canada after the free trade agreement became effective. Using time-series data, a gravity equation is developed which enables us to examine the impacts of relative market size, exchange rates, and transportation costs on bilateral trade. It is found that these three effects have to be taken together in order to explain the asymmetric intra-industry trade pattern. Exchange rate impacts on bilateral trade are found to the most significant, indicating that U.S. dollar appreciation causes a more asymmetric trade pattern for agricultural goods than for large-scale manufacturing goods.

Suggested Citation

  • Kim, MinKyoung & Cho, Guedae & Koo, Won W., 2003. "Asymmetric Pattern Of Intra-Industry Trade Between The United States And Canada," Agribusiness & Applied Economics Report 23625, North Dakota State University, Department of Agribusiness and Applied Economics.
    • Handle: RePEc:ags:nddaae:23625
    DOI: 10.22004/ag.econ.23625
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    File URL: https://ageconsearch.umn.edu/record/23625/files/aer526.pdf
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    Cited by:

    1. Anderson, James & Vesselovsky, Mykyta & Yotov, Yoto, 2014. "Gravity with Scale Economies," School of Economics Working Paper Series 2014-4, LeBow College of Business, Drexel University.
    2. James E. Anderson & Mykyta Vesselovsky & Yoto V. Yotov, 2013. "Gravity, Scale and Exchange Rates," NBER Working Papers 18807, National Bureau of Economic Research, Inc.
    3. Nasser Al‐Mawali, 2005. "Country‐Specific Determinants Of Vertical And Horizontal Intra‐Industry Trade Of South Africa: An Empirical Investigation," South African Journal of Economics, Economic Society of South Africa, vol. 73(3), pages 406-425, September.
    4. Anderson, James E. & Vesselovsky, Mykyta & Yotov, Yoto V., 2016. "Gravity with scale effects," Journal of International Economics, Elsevier, vol. 100(C), pages 174-193.

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    Keywords

    International Relations/Trade;

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