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Product specialization in international trade: A further investigation


  • Pham, Cong S.


In an influential paper, Schott [Schott. Peter K. (2004). "Across-product versus within-product specialization in international trade." Quarterly Journal of Economics, 119 (2): 647-678] makes two empirical observations about U.S. imports. (1) The United States is increasingly sourcing the same product (however narrowly defined) from both developed and developing countries. That is, 'across-product specialization' has been decreasing. (2) The unit values of these multiple-sourced products are positively and significantly correlated with the capital and skill abundance of exporters and with the capital-labor ratios used by exporters. That is, endowments-driven 'within-product specialization' has been increasing. We show that both these observations extend to the imports of Brazil, India and Japan. However, our main finding is that observation (1) is largely driven by two factors. First, China is the dominant low-wage exporter of multiple-sourced products. Second, the most developed countries remain the primary exporters of multiple-sourced products. The U.S. case is the most extreme of our four importers: When China is deleted from the U.S. import data there is no trend in across-product specialization and rich exporters are increasing their trade share of multiple-sourced products. Since deleting China has no theoretical justification, these results must be viewed not as a contradiction of Schott's work but as a way of deepening our understanding of his empirical results.

Suggested Citation

  • Pham, Cong S., 2008. "Product specialization in international trade: A further investigation," Journal of International Economics, Elsevier, vol. 75(1), pages 214-218, May.
  • Handle: RePEc:eee:inecon:v:75:y:2008:i:1:p:214-218

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    References listed on IDEAS

    1. Rudiger Dornbusch & Stanley Fischer & Paul A. Samuelson, 1980. "Heckscher-Ohlin Trade Theory with a Continuum of Goods," The Quarterly Journal of Economics, Oxford University Press, vol. 95(2), pages 203-224.
    2. Peter K. Schott, 2004. "Across-Product Versus Within-Product Specialization in International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 119(2), pages 647-678.
    3. Susan Chun Zhu, 2004. "Trade, product cycles, and inequality within and between countries," Canadian Journal of Economics, Canadian Economics Association, vol. 37(4), pages 1042-1060, November.
    4. Peter K. Schott, 2008. "The relative sophistication of Chinese exports," Economic Policy, CEPR;CES;MSH, vol. 23, pages 5-49, January.
    5. Zhu, Susan Chun & Trefler, Daniel, 2005. "Trade and inequality in developing countries: a general equilibrium analysis," Journal of International Economics, Elsevier, vol. 65(1), pages 21-48, January.
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    Cited by:

    1. Bekkers, Eddy & Francois, Joseph & Manchin, Miriam, 2012. "Import prices, income, and inequality," European Economic Review, Elsevier, vol. 56(4), pages 848-869.
    2. Schetter, Ulrich, 2016. "Comparative Advantages with Product Complexity and Product Quality," Annual Conference 2016 (Augsburg): Demographic Change 145933, Verein für Socialpolitik / German Economic Association.

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    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F2 - International Economics - - International Factor Movements and International Business


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