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Industrial Structure and Australia– UK Intra‐Industry Trade

Author

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  • JAYANT MENON
  • DAVID GREENAWAY
  • CHRIS MILNER

Abstract

This paper tests industry‐specific hypotheses of the determinants of intra‐industry trade in the context of Australia‐UK trade. In doing so it separates intra‐industry trade (ITT) into ITT in horizontally differentiated products and ITT in vertically differentiated products. It finds that the latter is the dominant former of ITT. Further the paper investigates the robustness of empirical results on testing industry‐specific hypotheses to the choice of national (UK or Australian) industrial structure characteristics. The assumption of uniform industrial structures across countries adopted in other studies is shown not to be justified.

Suggested Citation

  • Jayant Menon & David Greenaway & Chris Milner, 1999. "Industrial Structure and Australia– UK Intra‐Industry Trade," The Economic Record, The Economic Society of Australia, vol. 75(1), pages 19-27, March.
    • Handle: RePEc:bla:ecorec:v:75:y:1999:i:1:p:19-27
    DOI: 10.1111/j.1475-4932.1999.tb02430.x
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    References listed on IDEAS

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    2. Amemiya, Takeshi, 1973. "Regression Analysis when the Dependent Variable is Truncated Normal," Econometrica, Econometric Society, vol. 41(6), pages 997-1016, November.
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    4. 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;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(1), pages 77-100, March.
    5. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
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    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 1505-1518, November.
    8. Olsen, Randall J, 1978. "Note on the Uniqueness of the Maximum Likelihood Estimator for the Tobit Model," Econometrica, Econometric Society, vol. 46(5), pages 1211-1215, September.
    9. Johan Torstensson, 1991. "Quality differentiation and factor proportions in international trade: An empirical test of the Swedish case," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 127(1), pages 183-194, March.
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    Cited by:

    1. Sagnik Bagchi & Surajit Bhattacharyya, 2021. "Industry-level determinants of India’s vertical and horizontal IIT," Indian Economic Review, Springer, vol. 56(1), pages 113-145, June.

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