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Intra-industry Trade and Production Networks

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  • Toshihiro Okubo

    ()
    (IUHEI)

Abstract

This paper examines alternative determinants of intra-industry trade (IIT). Technology transfer via vertical FDI can be an alternative determinant to distance and country-specific factors in gravity equations. Vertical FDI is likely to be made in neighbouring countries in the presence of large gaps in wages and technology. These large gaps lead to foreign direct investment (FDI) and promote technology transfer from headquarters to overseas affiliates. The technology transfer through vertical FDI promotes activities in the overseas affiliates and thus increases re-imports, which can increase IIT.

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Bibliographic Info

Paper provided by Economics Section, The Graduate Institute of International Studies in its series IHEID Working Papers with number 13-2004.

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Length: 28
Date of creation: Dec 2004
Date of revision:
Handle: RePEc:gii:giihei:heiwp13-2004

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Related research

Keywords: FDI; Technology Transfer; Wage Gap; Comparative Advantage; Firm Heterogeneity.;

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References

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Citations

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Cited by:
  1. Fithra Faisal Hastiadi, 2012. "The Determinants of China-Japan-Koreas Vertical Intra Industry Trade to ASEAN4 countries," Working Papers in Economics and Business 201205, Faculty of Economics, University of Indonesia, revised May 2012.
  2. Kyoji Fukao & Toshihiro Okubo, 2004. "Why Has the Border Effect in the Japanese Market Declined? The Role of Business Networks in East Asia," Discussion papers 04016, Research Institute of Economy, Trade and Industry (RIETI).
  3. Lukasz Ambroziak, 2012. "FDI and intra-industry trade: theory and empirical evidence from the Visegrad Countries," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 180-198.

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