Industry-Specific Determinants of Intra-Industry Trade in India
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.
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Volume (Year): 42 (2007)
Issue (Month): 2 (December)
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