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Explaining the Volume of North-South Trade

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  • Markusen, James R
  • Wigle, Randall M

Abstract

Much of the recent literature on scale economies has been motivated by the large volume of trade among the industrialized countries relative to "North-South" trade. This paper presents theoretical and empirical analyses of two alternative hypotheses, one based on differences in North versus South GNP and one based on higher protection levels in the South. Counter-factual experiments using a numerical general-equilibrium model support the hypotheses that North-South trade is relatively small because the South is poor and highly protected. Copyright 1990 by Royal Economic Society.

Suggested Citation

  • Markusen, James R & Wigle, Randall M, 1990. "Explaining the Volume of North-South Trade," Economic Journal, Royal Economic Society, vol. 100(403), pages 1206-1215, December.
    • Handle: RePEc:ecj:econjl:v:100:y:1990:i:403:p:1206-15
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    Cited by:

    1. Fritz Breuss & Jean Tesche, 1994. "A general equilibrium evaluation of trade and industrial policy changes in Austria and Hungary," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(3), pages 534-552, September.
    2. Donald R. Davis & David E. Weinstein, 1996. "Does Economic Geography Matter for International Specialization?," NBER Working Papers 5706, National Bureau of Economic Research, Inc.
    3. Pau Pujolas & Wyatt Brooks, 2013. "Trade Patterns, Income Differences and Gains from Trade," 2013 Meeting Papers 445, Society for Economic Dynamics.
    4. Simon J. Evenett & Wolfgang Keller, 2002. "On Theories Explaining the Success of the Gravity Equation," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 281-316, April.
    5. Jun Ishii & Kei-Mu Yi, 1997. "The growth of world trade," Research Paper 9718, Federal Reserve Bank of New York.
    6. Arnade, Carlos Anthony, 1994. "Testing two trade models in Latin American agriculture," Agricultural Economics, Blackwell, vol. 10(1), pages 49-59, January.
    7. Trien T. Nguyen & Carlo Perroni & Randall M. Wigle, 1996. "Uruguay Round Impacts on Canada," Canadian Public Policy, University of Toronto Press, vol. 22(4), pages 342-355, December.
    8. Yongcheol Shin & Laura Serlenga, 2004. "Gravity Models of the Intra-EU Trade: Application of the Hausman-Taylor Estimation in Heterogeneous Panels with Common Time-specific Factors," Econometric Society 2004 Far Eastern Meetings 671, Econometric Society.
    9. Donald R. Davis & David E. Weinstein, 2001. "An Account of Global Factor Trade," American Economic Review, American Economic Association, vol. 91(5), pages 1423-1453, December.
    10. Sebil Olalekan Oshota & Bashir Adelowo Wahab, 2022. "Institutional Quality and Intra-Regional Trade Flows: Evidence from ECOWAS," Journal of African Trade, Springer, vol. 9(1), pages 73-106, December.
    11. Davis, Donald R., 1995. "Intra-industry trade: A Heckscher-Ohlin-Ricardo approach," Journal of International Economics, Elsevier, vol. 39(3-4), pages 201-226, November.
    12. Thi Hong Hanh Bui & Qiting Chen, 2017. "An Analysis of Factors Influencing Rice Export in Vietnam Based on Gravity Model," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(3), pages 830-844, September.
    13. James R. Markusen, 2021. "Putting per-capita income back into trade theory," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 10, pages 187-197, World Scientific Publishing Co. Pte. Ltd..
    14. Eugene Bempong Nyantakyi & Steven Husted & Shuichiro Nishioka, 2015. "Trade Frictions and Market Access of Developing Countries: A Product-level Empirical Investigation," Review of International Economics, Wiley Blackwell, vol. 23(5), pages 924-945, November.
    15. Ramezzana, Paolo, 2000. "Per capita income demand for variety, and international trade: Linder reconsidered," LSE Research Online Documents on Economics 20184, London School of Economics and Political Science, LSE Library.
    16. Javad Abedini & Nicolas Péridy, 2009. "The Emergence of Iran in the World Car Industry: An Estimation of its Export Potential," The World Economy, Wiley Blackwell, vol. 32(5), pages 790-818, May.
    17. repec:ebl:ecbull:v:6:y:2004:i:9:p:1-12 is not listed on IDEAS
    18. Nicolas PÉIDY, 2005. "Toward A Pan-Arab Free Trade Area: Assessing Trade Potential Effects Of The Agadir Agreement," The Developing Economies, Institute of Developing Economies, vol. 43(3), pages 329-345, September.
    19. Das, Gouranga G., 2007. "Intra-Industry Trade and Development: Revisiting Theory, Measurement and New Evidences," MPRA Paper 37260, University Library of Munich, Germany, revised 01 Sep 2008.
    20. Fidrmuc, Jarko, 1999. "Trade Diversion in the 'Left-Outs' in the Eastward Enlargement of the European Union," Transition Economics Series 8, Institute for Advanced Studies.
    21. Simone Juhasz Silva & Douglas Nelson, 2012. "Does Aid Cause Trade? Evidence from an Asymmetric Gravity Model," The World Economy, Wiley Blackwell, vol. 35(5), pages 545-577, May.
    22. Das, Gouranga G., 2002. "Cross-Country Analysis of Empirical Evidences of Intra-industry Trade in Manufactures for Dynamic Asian and Other Developing Economies: Implications for Economic Growth and Development," MPRA Paper 37916, University Library of Munich, Germany, revised 2002.
    23. Davis, Donald R, 1997. "Critical Evidence on Comparative Advantage? North-North Trade in a Multilateral World," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 1051-1060, October.
    24. Jarko Fidrmuc & Andreas Worgotter & Julia Worz, 2003. "Does foreign policy determine foreign trade? Cointegration analysis of exports from selected countries to the Middle East," Applied Economics, Taylor & Francis Journals, vol. 35(5), pages 565-571.

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