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New Aspects of Intra-Industry trade: Evidence from EU-15 countries

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Author Info

  • Tadashi Ito

    (Okinawa University, Japan)

  • Toshihiro Okubo

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

Abstract

This paper argues about some missing aspects of intra-industry trade (IIT) and proposes some alternative measures to better capture the nature of IIT. We show the over-time evolution of the number of IIT products, and propose an index which captures the share of the number of IIT products over the number of all traded goods. We also show how arbitrary the conventional classification into Horizontal and Vertical IIT indices are, and then propose a new measure using the unit value difference of IIT products. To discuss these issues we use trade data at HS 8 digit product level of EU 15 countries for the period 1988-2007, mainly within EU countries as well as with Eastern European countries, and with China as major EU trading partners. Our findings include the Eastern European countries' rise up the quality ladder, and the substantially lower prices of China's exports to EU 15 countries vis-à-vis China's imports from them, whose gap is not narrowing even in very recent years.

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File URL: http://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2011-02.pdf
File Function: First version, 2011
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Bibliographic Info

Paper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number DP2011-02.

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Length: 33 pages
Date of creation: Jan 2011
Date of revision:
Handle: RePEc:kob:dpaper:dp2011-02

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Related research

Keywords: Intra-industry trade; Horizontal and Vertical Product Differentiation; Quality; Unit price gap;

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References

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  1. Fukao, Kyoji & Ishido, Hikari & Ito, Keiko, 2003. "Vertical Intra-Industry Trade and Foreign Direct Investment in East Asia," Discussion Paper Series a434, Institute of Economic Research, Hitotsubashi University.
  2. Lionel Fontagné & Michaël Freudenberg & Nicolas Peridy, 1997. "Trade Patterns Inside the Single Market," Working Papers 1997-07, CEPII research center.
  3. Peter K. Schott, 2006. "The Relative Sophistication of Chinese Exports," NBER Working Papers 12173, National Bureau of Economic Research, Inc.
  4. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
  5. Lionel Fontagné & Michaël Freudenberg, 1997. "Intra-Industry Trade: Methodological Issues Reconsidered," Working Papers 1997-01, CEPII research center.
  6. Marius Brülhart & Robert Elliott, 2002. "Labour-market effects of intra-industry trade: Evidence for the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(2), pages 207-228, June.
  7. Greenaway, David & Hine, Robert C & Milner, Chris, 1995. "Vertical and Horizontal Intra-industry Trade: A Cross Industry Analysis for the United Kingdom," Economic Journal, Royal Economic Society, vol. 105(433), pages 1505-18, November.
  8. Ana I. Moro & Juliette Milgram, 2008. "The Asymmetric Effect of Endowments on Vertical Intra-Industrial Trade," Working Papers. Serie EC 2008-13, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  9. Abdul K. M. Azhar & Robert J. R. Elliott, 2006. "On the Measurement of Product Quality in Intra-Industry Trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 142(3), pages 476-495, October.
  10. Ando, Mitsuyo, 2006. "Fragmentation and vertical intra-industry trade in East Asia," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 257-281, December.
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Cited by:
  1. Joanna Kuczewska & Maciej Krzeminski, 2011. "Regional constructed advantages – case of Pomeranian Region in Poland," Working Papers 1105, Economics of European Integration Department, Faculty of Economics, University of Gdansk, Poland.
  2. Tomasz Brodzicki, 2011. "Handel zagraniczny panstw Grupy Wyszehradzkiej. Zmiany strukturalne i rola handlu wewnatrzgaleziowego," Working Papers 1104, Economics of European Integration Department, Faculty of Economics, University of Gdansk, Poland.

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