This paper measures and compares the Intraindustry Trade (IIT) levels between Colombia and its main economic regions with the Andean Community (AC). It finds that this trade has been overestimated in previous studies due to geographical and aggregation biases. The nature of IIT is predominantly vertical, where Colombia is found to produce higher quality varieties. As for the regions, the “center” provinces of each region explain the largest part of the sector composition of the most significant IIT flows with the AC. This result evidences the strong relationship between IIT and regional development, which is found to be more relevant than other factors such as geographical proximity.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
4936.
Find related papers by JEL classification: F14 - International Economics - - Trade - - - Country and Industry Studies of Trade F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
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