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Industry-Specific Determinants of Intra-Industry Trade in India

Author

Listed:
  • C. Veeramani

    (Indira Gandhi Institute of Development Research, Mumbai, India)

Abstract

The paper analyses the industry-specific determinants of intra-industry trade (IIT) in Indian manufacturing industries. We find that the intensity of IIT would be larger if an industry is characterized by a greater degree of product differentiation. The intensity of IIT reduces if the spectrum of production activities in an industry is confined to few locations because of plant level scale economies. We find a negative relationship between IIT and the extent of multinational involvement, indicating that foreign direct investment replaces export sales of differentiated products to the host countries.

Suggested Citation

  • C. Veeramani, 2007. "Industry-Specific Determinants of Intra-Industry Trade in India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 42(2), pages 211-229, December.
  • Handle: RePEc:dse:indecr:v:42:y:2007:i:2:p:211-229
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    Citations

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    Cited by:

    1. Bishwanath Goldar & Rashmi Banga, 2007. "Impact of Trade Liberalization on Foreign Direct Investment in Indian Industries," Working Papers 3607, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    2. Priyanka Singh Bhadouria & N.M.P. Verma, 2012. "Intra-industry trade in textile industry: the case of India," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 199-212.
    3. Arora, Tarun, 2015. "Employment-Export Elasticities for the Indian Textile Industry," Working Papers 349, Institute for Social and Economic Change, Bangalore.

    More about this item

    Keywords

    Intra-Industry Trade; Industry-Specific Determinants; India;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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