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Regional determinants of Colombian intra-industry trade

Author

Listed:
  • Catherine Valencia González
  • Carlos A. Pinzón Muñoz
  • Jaime Flórez Bolaños
  • Marco Aguilera-Prado

Abstract

Using three fixed-effect models, this paper establishes the determinants of regional Colombian intra-industry trade (IIT) from 1995 to 2017 with the aim of establish how regional characteristics generates competitive advantages in some internationals markets and the role of trade agreements in regional IIT. The models use IIT as a dependent variable and calculate IIT using the Grubel % Lloyd index for each tariff group. The explanatory variables used are those traditionally seen in the empirical literature on determinants. Following results are noteworthy: i) Colombian IIT is concentrated in four of the country's 32 regions; ii) IIT is also conducted with nearby countries and consists of labour-intensive goods for which the exporting companies absorb shipping costs; and iii) the current level of IIT has growth potential (with regional differences), given the low specialisation observed in Colombia's dealings with countries with low demand complexity and given the negligible significance of costs.

Suggested Citation

  • Catherine Valencia González & Carlos A. Pinzón Muñoz & Jaime Flórez Bolaños & Marco Aguilera-Prado, 2022. "Regional determinants of Colombian intra-industry trade," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 15(4), pages 391-405.
    • Handle: RePEc:ids:ijtrgm:v:15:y:2022:i:4:p:391-405
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