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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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    References listed on IDEAS

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    Cited by:

    1. Valerija Botrić, 2013. "Determinants of Intra-industry Trade between Western Balkans and EU-15: Evidence from Bilateral Data," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 6(2), pages 7-23, September.
    2. 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.
    3. 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.
    4. Nathapornpan Piyaareekul Uttama, 2012. "Some new evidence on intra-industry trade and complex FDI in ASEAN countries: a spatial panel approach," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 116-131.
    5. 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.
    6. 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.
    7. 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.
    8. 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.
    9. 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.

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    Intra-industry trade Asia;

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