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Patterns and determinants of intra-industry trade in Asia

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  • Sawyer, William C.
  • Sprinkle, Richard L.
  • Tochkov, Kiril

Abstract

Intra-industry trade (IIT) has gained in importance across Asia as a result of the rapid growth of Asian economies and their key role in the international fragmentation of production. This paper examines the level of IIT for 22 countries in East, Southeast, South, and Central Asia in 2003. IIT is measured as a multilateral trade-weighted index and is reported for ten different categories of goods in the primary and secondary sectors. In addition, the determinants of IIT are investigated using a Tobit regression model. The results indicate that ASEAN and the high-income countries in East Asia exhibit the highest levels of IIT, followed closely by China and India. R&D spending, openness, and a higher share of manufactured exports were found to promote IIT, while geographical distance and the difference in economic size had an adverse effect, especially for manufactured goods. The ASEAN free trade area was most prominently associated with IIT across all SITC categories. Central and South Asian regional trade agreements had a positive influence on IIT in primary products.

Suggested Citation

  • Sawyer, William C. & Sprinkle, Richard L. & Tochkov, Kiril, 2010. "Patterns and determinants of intra-industry trade in Asia," Journal of Asian Economics, Elsevier, vol. 21(5), pages 485-493, October.
    • Handle: RePEc:eee:asieco:v:21:y:2010:i:5:p:485-493
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    Cited by:

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    4. Sakshi Aggarwal & Debashis Chakraborty, 2021. "Which Factors influence Vertical Intra-Industry Trade in India? Empirical Results from Panel Data Analysis," Working Papers 2154, Indian Institute of Foreign Trade.
    5. C.T. Vidya & K.P. Prabheesh, 2019. "Intra-Industry Trade Between India And Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 0(12th BMEB), pages 1-20, January.
    6. Wen-Xi Ruan & Xin Yu & Sheng-Yuan Wang & Tian-Cheng Zhao & Ya-Zhen Liu, 2022. "Exploration of China–ASEAN Trade Relations in the Context of Sustainable Economic Development—Based on the Lotka–Volterra Model," Sustainability, MDPI, vol. 15(1), pages 1-22, December.
    7. Sakshi Aggarwal & Debashis Chakraborty, 2022. "Which Factors Influence India’s Bilateral Intra-Industry Trade? Cross-Country Empirical Estimates," Working Papers 2260, Indian Institute of Foreign Trade.
    8. Hong Zhuang, 2017. "The effect of foreign direct investment on human capital development in East Asia," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 22(2), pages 195-211, April.
    9. Aggarwal, Sakshi, 2023. "Intra-industry trade: Revisiting theory and Literature Survey," MPRA Paper 117182, University Library of Munich, Germany.
    10. Zhelev, Paskal, 2018. "Bulgarian-Chinese economic relations in the context of 16+1 Cooperation," MPRA Paper 104599, University Library of Munich, Germany.
    11. Ruhul Salim & Amirul Islam & Harry Bloch, 2018. "Patterns And Determinants Of Intra-Industry Trade In Southeast Asia: Evidence From The Automotive And Electrical Appliances Sectors," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(03), pages 647-665, June.
    12. Minsung Kang & Jeong-Dong Lee, 2012. "Vertical intra-industry trade and product quality: the case of South Korea, 1996–2003," Economics and Business Letters, Oviedo University Press, vol. 1(3), pages 37-47.
    13. Athukorala, Prema-chandra & Yamashita, Nobuaki, 2006. "Production fragmentation and trade integration: East Asia in a global context," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 233-256, December.
    14. repec:mth:ijafr8:v:8:y:2018:i:4:p:22-59 is not listed on IDEAS
    15. Wong, Chin-Yoong & Eng, Yoke-Kee, 2013. "International business cycle co-movement and vertical specialization reconsidered in multistage Bayesian DSGE model," International Review of Economics & Finance, Elsevier, vol. 26(C), pages 109-124.
    16. Mitchell Kellman & Mitchell Yochanan Shachmurove, 2012. "Trade Sophistication in a Transition Economy: Poland 1980–2009," Working Papers 64, Department of Applied Econometrics, Warsaw School of Economics.
    17. Krzysztof Beck, 2020. "Determinants of Intra-Industry Trade: An Investigation with Bma for the European Union," Journal of International Business Research and Marketing, Inovatus Services Ltd., vol. 5(6), pages 19-22, September.
    18. Nobuaki Hamaguchi & Silvio Miyazaki & Leonardo Correia, 2014. "State Space Application to Recent Automobile Sector Triangle Trade between Japan and Latin America," Discussion Paper Series DP2014-05, Research Institute for Economics & Business Administration, Kobe University.
    19. Amadeo Navarro Zapata & María Arrazola & José Hevia, 2023. "Technological intensity in manufacturing trade between ASEAN and the EU: challenges and opportunities," Asia Europe Journal, Springer, vol. 21(1), pages 23-42, March.
    20. Shinichi Furuzawa & Lily Kiminami, 2017. "Changes in the international specialization of food manufacturing industry in East Asia," Asia-Pacific Journal of Regional Science, Springer, vol. 1(2), pages 359-378, October.
    21. Clark, Don P., 2011. "Factor adjustment implications of a free trade agreement between the United States and Thailand," Journal of Asian Economics, Elsevier, vol. 22(3), pages 213-221, June.
    22. Sagnik Bagchi & Surajit Bhattacharyya, 2021. "Industry-level determinants of India’s vertical and horizontal IIT," Indian Economic Review, Springer, vol. 56(1), pages 113-145, June.
    23. Li, Fangyi & Song, Zhouying & Liu, Weidong, 2014. "China's energy consumption under the global economic crisis: Decomposition and sectoral analysis," Energy Policy, Elsevier, vol. 64(C), pages 193-202.

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