Advanced Search
MyIDEAS: Login to save this paper or follow this series

Trade Liberalization and Intra-Industry Specialization: The Australian Experience

Contents:

Author Info

  • Jayant Menon

Abstract

Much of the growth in trade among the industrialised countries, and more recently among countries in the Asia-Pacific region, has taken the form of intra-industry trade (IIT). Australia has historically had one of the lowest shares of IIT among OECD countries. This paper examines how Australia's IIT has changed in the 1980s in response to the process of trade liberalisation and completion of the CER pact with New Zealand. Towards this end, IIT indexes are estimated for Australia's multilateral and trans-Tasman trade for 1981 and 1991 for 132 industries using data at the 3 and 4-digit level of the SITC. The results point to a sharp increase in the share of IIT for both multilateral and trans-Tasman trade. We also find that the industries that had undergone the largest reductions in protection levels had also increased their shares of IIT quite considerably. These findings suggest that the short to medium run adjustment costs associated with trade liberalisation are likely to be lower than expected as a result of increased intra-industry specialisation. If IIT continues to grow in response to the on-going process of internationalisation of the Australian economy, then Australia's prospects for expanding its share in world trade, and particularly in the Asia-Pacific region, are likely to be significantly boosted.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.copsmodels.com/ftp/workpapr/g-107.pdf
File Function: Initial version, 1994-06
Download Restriction: no

File URL: http://www.copsmodels.com/elecpapr/g-107.htm
File Function: Local abstract: may link to additional material.
Download Restriction: no

Bibliographic Info

Paper provided by Victoria University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-107.

as in new window
Length:
Date of creation: Jun 1994
Date of revision:
Handle: RePEc:cop:wpaper:g-107

Contact details of provider:
Postal: PO Box 14428, Melbourne, Victoria, 8001
Phone: 03 9919 1877
Web page: http://www.copsmodels.com/about.htm
More information through EDIRC

Related research

Keywords:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Ratnayake, Ravindra & Jayasuriya, Sisira, 1991. "Intra-industry trade and protection : Which way does the causation go?," Economics Letters, Elsevier, Elsevier, vol. 36(1), pages 71-76, May.
  2. repec:ltr:wpaper:1990.04 is not listed on IDEAS
  3. Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 89(5), pages 959-73, October.
  4. Lancaster, Kelvin, 1980. "Intra-industry trade under perfect monopolistic competition," Journal of International Economics, Elsevier, Elsevier, vol. 10(2), pages 151-175, May.
  5. Falvey, Rodney E., 1981. "Commercial policy and intra-industry trade," Journal of International Economics, Elsevier, Elsevier, vol. 11(4), pages 495-511, November.
  6. Caves, Richard E, 1981. "Intra-Industry Trade and Market Structure in the Industrial Countries," Oxford Economic Papers, Oxford University Press, Oxford University Press, vol. 33(2), pages 203-23, July.
  7. Alan Bollard, 1986. "The Economic Relations Agreement Between Australia and New Zealand: A Tentative Appraisal," Journal of Common Market Studies, Wiley Blackwell, Wiley Blackwell, vol. 25(2), pages 89-107, December.
  8. Jones, Ronald W & Scheinkman, Jose A, 1977. "The Relevance of the Two-Sector Production Model in Trade Theory," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 85(5), pages 909-35, October.
  9. Ravindra Ratnayake & Sisira Kumara Jayasuriya, 1990. "Intra Industry Trade & Protection: Which way does the Causation go?," Working Papers, School of Economics, La Trobe University 1990.04, School of Economics, La Trobe University.
  10. Antonio Aquino, 1978. "Intra-industry trade and inter-industry specialization as concurrent sources of International Trade in manufactures," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 114(2), pages 275-296, June.
  11. 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, Springer, vol. 126(1), pages 25-49, March.
  12. Greenaway, David & Milner, Chris R, 1983. "On the Measurement of Intra-Industry Trade," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 93(372), pages 900-908, December.
  13. Finger, J M, 1975. "Trade Overlap and Intra-Industry Trade," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 13(4), pages 581-89, December.
  14. Jayant Menon & Peter Dixon, 1996. "How important is intra-industry trade in trade growth?," Open Economies Review, Springer, Springer, vol. 7(2), pages 161-175, April.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Jayanthakumaran, K. & Pahlavani, M., 2006. "Australia and New Zealand CER agreement and breakpoints in bilateral trade: an application of the Wald-type test," Applied Econometrics and International Development, Euro-American Association of Economic Development, Euro-American Association of Economic Development, vol. 6(2).
  2. Jayanthakumaran, Kankesu, 2004. "An Empirical Assessment of the Impact of Intra-Industry Trade on Employment: Australia 1989/90-2000/01," Economics Working Papers, School of Economics, University of Wollongong, NSW, Australia wp04-11, School of Economics, University of Wollongong, NSW, Australia.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cop:wpaper:g-107. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Horridge).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.