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Vertical and Horizontal Intra-Industry Trade Beetween the U.S. and Nafta Partners

Author

Listed:
  • E. M. Ekanayake

    (School of Business, Bethune-Cookman university, 640 dr. Mary Mcleod Bethune Blvd. Daytona Beach, FL 32114 - 3099, USA.)

  • Bala Veeramacheneni

    (Department of history, economics, and Politics, Farmingdale sate college, 2350 Broadhallow road, Farmingdale, NY 11735-1021, USA.)

  • Carlos Moslares

    (Facultat d'economia IQs, Universitat Ramon llull, Via Augusta 390, 08017 Barcelona, Spain.)

Abstract

The main objectives of this paper are to (a) explain the extent of vertical and horizontal intra-industry trade in the United State's foreign trade with the North American Free Trade Area (NAFTA), and (b) identify the industry-specific determinants of vertical and horizontal intra-industry trade. One of the main findings is that the observed increase in intra-industry trade between the United States and NAFTA is almost entirely due to two-way trade in vertical differentiation. Another important finding is that the share of horizontal intra-industry trade has increased significantly during this period, although vertical intra-industry trade continued to be dominant in the U.S.-NAFTA IIT Trade. Among the industry-specific variables, product differentiation, vertical product differentiation, and product quality differences are found to have a positive effect on all three types of IIT shares. Industry concentration and industry size are found to have a negative and statistically significant effect on all three types of IIT share.

Suggested Citation

  • E. M. Ekanayake & Bala Veeramacheneni & Carlos Moslares, 2009. "Vertical and Horizontal Intra-Industry Trade Beetween the U.S. and Nafta Partners," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 24(1), pages 21-42, Junio.
    • Handle: RePEc:ila:anaeco:v:24:y:2009:i:1:p:21-42
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    Citations

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    Cited by:

    1. Maritza Sotomayor, 2016. "Vertical Specialization of Production: Critical Review and Empirical Evidence for the Mexican Manufacturing Industries 1994-2014," International Journal of Business and Social Research, LAR Center Press, vol. 6(2), pages 11-28, February.
    2. Maritza Sotomayor, 2016. "Vertical Specialization of Production: Critical Review and Empirical Evidence for the Mexican Manufacturing Industries 1994-2014," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 6(2), pages 11-28, February.
    3. Ke Pang & Yao Tang, 2014. "Vertical Trade, Exchange Rate Pass-Through, and the Exchange Rate Regime," Open Economies Review, Springer, vol. 25(3), pages 477-520, July.

    More about this item

    Keywords

    Vertical and Horizontal Intra-Industry Trade; NAFTA.;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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