Advanced Search
MyIDEAS: Login

Horizontal and vertical intra-industry trade of Nafta and Mercosur: The case of the automobile industry

Contents:

Author Info

  • Montout, Sylvie
  • Mucchielli, Jean-Louis
  • Zignago, Soledad

Abstract

The NAFTA and MERCOSUR agreements seem to have accelerated the regional integration process respectively within North and South of America. In the South in particular, MERCOSUR has led to trade liberalisation and deregulation, which has resulted in significant growth of its regional trade. In this article, we study the pattern of that trade growth in the automobile industry. Our results highlight an increase of intra-industry trade in the corresponding industry since the beginning of the 1990s. Firstly, we use the Grubel and Lloyd indicator (1975). Secondly, following Abd-el-Rahman (1991), Greenaway et al. (1995), Fontagné and Freudenberg (1997), we distinguish horizontally differentiated goods from vertically differentiated goods using a comparison of the unit values. With the increase of intra-industry trade, it appears that MERCOSUR has favoured in particular the development of trade in vertically differentiated goods. In NAFTA, intra-industry trade exists in most sectors and in two bilateral relations (US-Canada and US-Mexico). In MERCOSUR, the automobile industry has experienced the highest rate of growth in intraindustry trade, which accounts for 66% of total trade and 90% of all intra-regional trade. Thirdly, we analyse the nature of that increase and more precisely, the determinants of intra-industry trade. In order to explain the pattern of trade for the automobile industry, we use a gravity-type model taking into account some country-specific variables.

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://mpra.ub.uni-muenchen.de/43928/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 43928.

as in new window
Length:
Date of creation: Nov 2001
Date of revision:
Handle: RePEc:pra:mprapa:43928

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: Intra-Industry Trade; Regional Integration; NAFTA; MERCOSUR; Automotive Industry;

Other versions of this item:

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. Steven Berry & Vittorio Grilli & F. Lopez-de-Silanes, 1992. "The Automobile Industry and The Mexico-Us Free Trade Agreement," NBER Working Papers 4152, National Bureau of Economic Research, Inc.
  2. Nicolas Péridy & Michael Frudenberg & Lionel Fontagné, 1998. "Commerce international et structures de marché : une vérification empirique," Économie et Prévision, Programme National Persée, vol. 135(4), pages 147-167.
  3. Don Clark, 1993. "Recent evidence on determinants of intra-industry trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 129(2), pages 332-344, June.
  4. Lionel Fontagné & Michaël Freudenberg & Nicolas Peridy, 1997. "Trade Patterns Inside the Single Market," Working Papers 1997-07, CEPII research center.
  5. 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.
  6. Menon, Jayant & Greenaway, David & Milner, Chris, 1999. "Industrial Structure and Australia-UK Intra-industry Trade," The Economic Record, The Economic Society of Australia, vol. 75(228), pages 19-27, March.
  7. Xiaoling Hu & Yue Ma, 1999. "International intra-industry trade of China," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(1), pages 82-101, March.
  8. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
  9. Bergstrand, Jeffrey H, 1990. "The Heckscher-Ohlin-Samuelson Model, the Linder Hypothesis and the Determinants of Bilateral Intra-industry Trade," Economic Journal, Royal Economic Society, vol. 100(403), pages 1216-29, December.
  10. Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 959-73, October.
  11. Flam, Harry & Helpman, Elhanan, 1987. "Vertical Product Differentiation and North-South Trade," American Economic Review, American Economic Association, vol. 77(5), pages 810-22, December.
  12. Brander, James & Krugman, Paul, 1983. "A 'reciprocal dumping' model of international trade," Journal of International Economics, Elsevier, vol. 15(3-4), pages 313-321, November.
  13. 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.
  14. Chonira Aturupane & Simeon Djankov & Bernard Hoekman, 1999. "Horizontal and vertical intra-industry trade between Eastern Europe and the European union," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(1), pages 62-81, March.
  15. Joan A. Martín & Vicente Orts, 2001. "A two-stage analysis of monopolistic competition models of intraindustry trade," Investigaciones Economicas, Fundación SEPI, vol. 25(2), pages 315-333, May.
  16. Jean-Louis Mucchielli & B. Lassudrie-Duchêne, 1979. "Les échanges intra-branche et la hiérarchisation des avantages comparés dans le commerce international," Revue Économique, Programme National Persée, vol. 30(3), pages 442-486.
  17. Lionel Fontagné & Michaël Freudenberg, 1997. "Intra-Industry Trade: Methodological Issues Reconsidered," Working Papers 1997-01, CEPII research center.
  18. Steven Globerman, 1992. "North American trade liberalization and intra-industry trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 128(3), pages 487-497, September.
  19. Fabrice Mazerolle & Jean-Louis Mucchielli, 1988. "Commerce intra-branche et intra-produit dans la spécialisation internationale de la France : 1960-1985," Revue Économique, Programme National Persée, vol. 39(6), pages 1193-1218.
  20. 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.
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. Rosanna Pittiglio, Rosanna, 2008. "The intra-industry trade for a high-income country: new empirical evidence for Italy," SIRE Discussion Papers 2008-17, Scottish Institute for Research in Economics (SIRE).
  2. Kemal Türkcan, 2009. "Vertical Intra-Industry Trade: An Empirical Examination of the Austria’s Auto-Parts Industry," FIW Working Paper series 030, FIW.
  3. Kemal Türkcan, 2011. "Vertical Intra-Industry Trade and Product Fragmentation in the Auto-Parts Industry," Journal of Industry, Competition and Trade, Springer, vol. 11(2), pages 149-186, June.
  4. Nuno Carlos Leitão & Horácio C. Faustino & Yushi Yoshida, 2010. "Fragmentation, Vertical Intra-Industry Trade, and Automobile components," Economics Bulletin, AccessEcon, vol. 30(2), pages 1006-1015.
  5. Maylene Y. Damoense-Azevedo & André C. Jordaan, 2012. "Factors influencing bilateral intra-industry trade in the auto industry: the case of South Africa," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 63-82.

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:pra:mprapa:43928. 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: (Ekkehart Schlicht).

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.