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Intra-industry Trade and Differences in Technology

  • Broll, Udo
  • Gilroy, B Michael

The approach focussed on allows one to examine theoretically the empirical observation of increasing levels of intra-industry trade flows founded upon an increasing similarity of technology between countries and firms. Within the framework of a simple model of international trade in differentiated goods it is demonstrated that an in an international free trade scenario ranking high in product differentiation and monopolistic market structures the intensity of intra-industry trade is dependent upon the degree of differences present in applied technology. Technologlcal similarity among nations results in high levels of intra-industry trade; whereas persistent differences in available technology reduces intra-industrial trade flows.

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Article provided by Scottish Economic Society in its journal Scottish Journal of Political Economy.

Volume (Year): 35 (1988)
Issue (Month): 4 (November)
Pages: 399-403

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Handle: RePEc:bla:scotjp:v:35:y:1988:i:4:p:399-403
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  1. Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 451-71, June.
  2. Broll, Udo & Gilroy, Bernard Michael, 1985. "International Division of Labour and Intra-Trade," MPRA Paper 18042, University Library of Munich, Germany.
  3. Economides, Nicholas, 1984. "Do increases in preference similarity (across countries) induce increases in trade? : An affirmative example," Journal of International Economics, Elsevier, vol. 17(3-4), pages 375-381, November.
  4. Balassa, Bela, 1986. "Intra-Industry specialization : A cross-country analysis," European Economic Review, Elsevier, vol. 30(1), pages 27-42, February.
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