The Geography of Intra-Industry Trade: Empirics
AbstractThis Paper uses bilateral trade data for OECD countries at the 3-digit industry level to investigate the geography of intra-industry trade (IIT). IIT diminishes with distance and much of the existing empirical literature suggests that this is an inherent characteristic of such trade, arguing that trade in sectors intensive in IIT is choked off rapidly by distance. We show that the dependence of IIT on geography arises not because of any inherent feature of the effects of distance on such trade, but because of the spatial structure of countries’ supply and demand characteristics; close countries do a lot of IIT because they have similar economic structures.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3368.
Date of creation: May 2002
Date of revision:
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Other versions of this item:
- F10 - International Economics - - Trade - - - General
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-03-14 (All new papers)
- NEP-GEO-2003-03-14 (Economic Geography)
- NEP-IND-2003-03-14 (Industrial Organization)
- NEP-LAM-2003-03-14 (Central & South America)
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