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The Geography of Intra-Industry Trade: empirics

  • Venables Anthony J.

    ()

    (London School of Economics)

  • Rice Patricia G.

    ()

    (University of Southampton)

  • Stewart Martin

    ()

    (London School of Economics)

This paper uses bilateral trade data for OECD countries at the 3-digit industry level to investigate the geography of intra-industry trade (IIT). IIT diminishes with distance and much of the existing empirical literature suggests that this is an inherent characteristic of such trade, arguing that trade in sectors intensive in IIT is choked off rapidly by distance. We show that the dependence of IIT on geography arises not because of any inherent feature of the effects of distance on such trade, but because of the spatial structure of countries’ supply and demand characteristics; close countries do a lot of IIT because they have similar economic structures.

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Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 3 (2003)
Issue (Month): 1 (September)
Pages: 1-25

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Handle: RePEc:bpj:bejeap:v:topics.3:y:2003:i:1:n:11
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  1. Hummels, David & Levinsohn, James, 1995. "Monopolistic Competition and International Trade: Reconsidering the Evidence," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 799-836, August.
  2. Stephen Redding & Anthony J. Venables, 2001. "Economic Geography and International Inequality," International Trade 0103003, EconWPA.
  3. Claudy Culem & Lars Lundberg, 1986. "The product pattern of intra-industry trade: Stability among countries and over time," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 122(1), pages 113-130, March.
  4. Balassa, Bela & Bauwens, Luc, 1988. "The determinants of intra-European trade in manufactured goods," European Economic Review, Elsevier, vol. 32(7), pages 1421-1437, September.
  5. Rudolf Loertscher & Frank Wolter, 1980. "Determinants of intra-industry trade: Among countries and across industries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 116(2), pages 280-293, June.
  6. Balassa, Bela, 1986. "Intra-Industry specialization : A cross-country analysis," European Economic Review, Elsevier, vol. 30(1), pages 27-42, February.
  7. Balassa, Bela & Bauwens, Luc, 1987. "Intra-industry Specialisation in a Multi-country and Multi-industry Framework," Economic Journal, Royal Economic Society, vol. 97(388), pages 923-39, December.
  8. Bela Balassa & Luc Bauwens, 1988. "Inter-industry and intra-industry specialization in manufactured goods," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 124(1), pages 1-13, March.
  9. Emilio Pagoulatos & Robert Sorensen, 1975. "Two-way International trade: An econometric analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 111(3), pages 454-465, 09.
  10. Joe Stone & Hyun-Hoon Lee, 1995. "Determinants of intra-industry trade: A longitudinal, cross-country analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 131(1), pages 67-85, March.
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