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Intra-Industry Trade and Revealed Comparative Advantage: An Inverted-U Relationship

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  • Horácio Faustino

Abstract

This paper investigates the relationship between all types of intra-industry trade (IIT) and comparative advantage. The paper finds strong evidence of an inverted-U relationship.The results also suggest that relative autarky costs is a common determinant for any type of IIT, which contradicts the prediction made by theory for separating the determinants of horizontal and vertical IIT.

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File URL: http://pascal.iseg.utl.pt/~depeco/wp/wp032008.pdf
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Bibliographic Info

Paper provided by ISEG - School of Economics and Management, Department of Economics, University of Lisbon in its series Working Papers Department of Economics with number 2008/03.

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Date of creation: Jan 2008
Date of revision:
Handle: RePEc:ise:isegwp:wp32008

Contact details of provider:
Postal: Department of Economics, ISEG - School of Economics and Management, University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Web page: https://aquila1.iseg.ulisboa.pt/aquila/departamentos/EC

Related research

Keywords: intra-industry trade; horizontal intra-industry trade; vertical intra-industry trade; comparative advantage.;

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References

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  1. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
  2. David Greenaway & Robert Hine & Chris Milner & Robert Elliott, 1994. "Adjustment and the measurement of marginal intra-industry trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 130(2), pages 418-427, June.
  3. P. Tharakan & Birgit Kerstens, 1995. "Does North-South horizontal intra-industry trade really exist? An analysis of the toy industry," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 131(1), pages 86-105, March.
  4. Lancaster, Kelvin, 1980. "Intra-industry trade under perfect monopolistic competition," Journal of International Economics, Elsevier, vol. 10(2), pages 151-175, May.
  5. David Greenaway & Robert Hine & Chris Milner, 1994. "Country-specific factors and the pattern of horizontal and vertical intra-industry trade in the UK," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 130(1), pages 77-100, March.
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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, Faculty of Economics, University of Indonesia 201205, Faculty of Economics, University of Indonesia, revised May 2012.
  2. Fithra Faisal Hastiadi, 2011. "East Asian Regionalism: The Need For Asean+3 Fta," Journal of Global Business and Economics, Global Research Agency, vol. 3(1), pages 31-56, July.

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