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Country-specific Determinants of Intra Industry Trade Types of Agricultural Sector in Selected Developing Countries

Author

Listed:
  • Saeed Rasekhi

    (Associate Professor of Economics, University of Mazandaran, Babolsar, Iran)

  • Shideh Shojaee

    (M.A. in Economics, the University of Mazandaran, Babolsar, Iran)

Abstract

Regarding few studies of intra industry trade in the agricultural sector, this study have examined country-specific determinants of intra industry trade of agriculture in selected developing countries by using panel technique for trade data at 6-digit level of HS classification over time period 2001-2007. By employing Greenaway, Hine and Milner and Fontagné and Freudenberg approaches we’ve first divided intra industry trade into its types that is horizontal and vertical ones. Then, based on theoretical and empirical studies, we’ve estimated determinants of the types of intra industry trade. Overall and based on the results, it seems that the level of development and growth (Human development index) has a significant positive effect on intra industry trade of agriculture in countries under study. Also, the revealed comparative advantage has a significant positive effect on vertical intra industry trade and a significant negative effect on the horizontal intra industry trade in agricultural commodity groups. However, there is no definite result on the effect of exchange rate and trade openness.

Suggested Citation

  • Saeed Rasekhi & Shideh Shojaee, 2012. "Country-specific Determinants of Intra Industry Trade Types of Agricultural Sector in Selected Developing Countries," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 17(1), pages 85-99, winter.
    • Handle: RePEc:eut:journl:v:17:y:2012:i:1:p:85
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    References listed on IDEAS

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    1. David Greenaway & Robert Hine & Chris Milner, 1994. "Country-specific factors and the pattern of horizontal and vertical intra-industry trade in the UK," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(1), pages 77-100, March.
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    6. Greenaway, David & Hine, Robert C & Milner, Chris, 1995. "Vertical and Horizontal Intra-industry Trade: A Cross Industry Analysis for the United Kingdom," Economic Journal, Royal Economic Society, vol. 105(433), pages 1505-1518, November.
    7. Imre Fertö, 2005. "Vertically Differentiated Trade and Differences in Factor Endowment: The Case of Agri‐Food Products between Hungary and the EU," Journal of Agricultural Economics, Wiley Blackwell, vol. 56(1), pages 117-134, March.
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