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Intra Industry Trade and Product Quality: China and Eight Developing Countries

Author

Listed:
  • Mastooreh Eshraghi

    (School of Graduate Studies, University Putra Malaysia, Malaysia)

  • Normaz Wana Ismail

    (Faculty of Economics and Management, University Putra Malaysia, Malaysia)

Abstract

This study aims to measure the export product quality improvement for trade between China and eight selected developing countries: Argentina, Brazil, Chile, Egypt, South Africa, Mexico, Turkey, and the Russian Federation based on disaggregated four-digit SITC data for the two periods 2000-2004 and 2004-2008. Vertical intra-industry trade high (VIITH) is considered as high quality products. The results revealed that the highest benefits of intra-industry trade with China are for South Africa in the first period and for Egypt in the second period. The highest positive growth of high quality products during the two periods is reported for Russia in the first period and for Brazil and Argentina in the second period. In conclusion, there is a massive potential for economic cooperation between China and these three partners.

Suggested Citation

  • Mastooreh Eshraghi & Normaz Wana Ismail, 2013. "Intra Industry Trade and Product Quality: China and Eight Developing Countries," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 12(1), pages 59-72, June.
  • Handle: RePEc:ijb:journl:v:12:y:2013:i:1:p:59-72
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    References listed on IDEAS

    as
    1. AZHAR, Abdul K.M. & Elliott, Robert J.R. & Liu, Junting, 2008. "On the measurement of product quality in intra-industry trade: An empirical test for China," China Economic Review, Elsevier, vol. 19(2), pages 336-344, June.
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    3. Elhanan Helpman & Paul Krugman, 1987. "Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 026258087x, January.
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    9. Stefano Chiarlone, 2000. "Evidence of Product Differentiation and Relative Quality in Italian Trade," KITeS Working Papers 114, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2000.
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    More about this item

    Keywords

    intra industry trade; product quality value; China;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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