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Dynamics of Intraindustry Trade and Labor-Market Adjustment

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  • Brulhart, Marius

Abstract

This paper investigates some dynamic aspects of the "smooth adjustment hypothesis" that is commonly associated with intraindustry trade (IIT). The analysis is conducted on a panel of plant-level employment data and industry-level production and trade data for Ireland. Rates of intraindustry job turnover are used as a proxy for labor-market adjustment. Three findings stand out. First, a measure of marginal IIT is found to be more appropriate for the analysis of adjustment issues than the traditional static IIT index. Second, the effect of marginal IIT on labor-market adjustment is most significant in the short term, namely for indices calculated on one-year intervals and lagged by one year. Third, the most significant determinants of the intraindustry job turnover rate are sector-level plant concentration ratios and trade openness. Copyright 2000 by Blackwell Publishing Ltd.

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  • Brulhart, Marius, 2000. "Dynamics of Intraindustry Trade and Labor-Market Adjustment," Review of International Economics, Wiley Blackwell, vol. 8(3), pages 420-435, August.
  • Handle: RePEc:bla:reviec:v:8:y:2000:i:3:p:420-35
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    References listed on IDEAS

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    Cited by:

    1. Abdul K. M. Azhar & Robert J. R. Elliott, 2008. "On the Measurement of Changes in Product Quality in Marginal Intra-Industry Trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 225-247.
    2. Fertő, Imre & Hubbard, Lionel J., 2003. "A vertikálisan és horizontálisan differenciált mezőgazdasági termékek ágazaton belüli kereskedelme Magyarország és az Európai Unió Között
      [Intra-industry trade in vertically and horizontally differ
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 152-163.
    3. Paulo Bastos & Manuel Cabral, 2007. "The Dynamics of International Trade Patterns," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 391-415.
    4. Goetz Zeddies, 2012. "International trade patterns and labour markets – an empirical analysis for EU member states," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, pages 96-115.
    5. Marius Brülhart & Robert Elliott, 2002. "Labour-market effects of intra-industry trade: Evidence for the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 207-228.
    6. ERLAT Guzin & ERLAT Haluk, "undated". "Intra-Industry Trade and Labour Market Adjustment in Turkey," EcoMod2003 330700049, EcoMod.
    7. Guzin Erlat & Haluk Erlat, 2006. "Intraindustry Trade and Labor Market Adjustment in Turkey: Another Piece of Puzzling Evidence?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 42(5), pages 5-27, October.
    8. Jayanthakumaran, Kankesu, 2004. "An Empirical Assessment of the Impact of Intra-Industry Trade on Employment: Australia 1989/90-2000/01," Economics Working Papers wp04-11, School of Economics, University of Wollongong, NSW, Australia.
    9. Grigori Fainštein & Aleksei Netšunajev, 2011. "Intra-Industry Trade Development in the Baltic States," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(0), pages 95-110, July.
    10. Karel Janda & Daniel Münich, 2004. "The Intra-Industry Trade of the Czech Republic in the Economic Transition," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 40(2), pages 27-50, March.
    11. Oana Ancuta STANGACIU & Eugenia HARJA, 2013. "Testing The Models Of Regional Specialization In Terms Of New Theories Of International Trade," Romanian Statistical Review, Romanian Statistical Review, vol. 61(2), pages 16-28, March.
    12. Roger White & Cheng Chen, 2012. "US manufacturing and vertical/horizontal intra-industry trade: examining the smooth adjustment hypothesis," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, pages 1-20.
    13. Guzin Erlat & Haluk Erlat, 2006. "Intraindustry Trade and Labor Market Adjustment in Turkey: Another Piece of Puzzling Evidence?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 42(5), pages 5-27, October.
    14. Abdul Azhar & Robert Elliott, 2003. "On the measurement of trade-induced adjustment," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 419-439.
    15. Grigori Fainštein & Aleksei Netšunajev, 2011. "Intra-Industry Trade Development in the Baltic States," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(0), pages 95-110, July.
    16. Ulf Lewrick & Lukas Mohler & Rolf Weder, 2014. "When firms and industries matter: understanding the sources of productivity growth," BIS Working Papers 469, Bank for International Settlements.
    17. Varma, Poornima & Issar Akash, 2017. "Intra-Industry Trade and Labour Market Adjustment: Indian Manufacturing Sector," IIMA Working Papers WP 2017-04-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    18. Imre Ferto & Lionel J. Hubbard, 2001. "Intra-Industry Trade in Agri-Food Products between Hungary and EU," IEHAS Discussion Papers 0106, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    19. R J R Elliott & J Lindley, 2003. "Trade, Skills and Adjustment Costs: A Study of Intra-Sectoral Labour Mobility in the UK," The School of Economics Discussion Paper Series 0312, Economics, The University of Manchester.
    20. M A Cole & R J R Elliott & K Shimamoto, 2003. "US Specialization in Pollution-Intensive Industries: Factor Intensities versus Environmental Regulations," The School of Economics Discussion Paper Series 0321, Economics, The University of Manchester.
    21. Zeddies, Götz, 2010. "International Trade Patterns and Labor Markets – An Empirical Analysis for EU Member States," IWH Discussion Papers 15/2010, Halle Institute for Economic Research (IWH).
    22. Mónica Rivera, 2014. "Trade patterns in the process of European integration: Evidence for the intraindustrial exchanges of a Mediterranean peripheral region," The Annals of Regional Science, Springer;Western Regional Science Association, pages 227-249.
    23. Fertő, Imre, 2006. "A társulási szerződés alkalmazkodási költségei a magyar élelmiszeriparban
      [The adjustment cost of the Association Agreement in the Hungarian food industry]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 799-811.

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