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Determinants of Intra-Industry Trade in Final Goods and Intermediate Goods between Turkey and Selected OECD Countries

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  • Kemal Turkcan

    () (Osmangazi University)

Abstract

The increased importance of fragmentation in world trade has created an interest among trade economists to explain the determinants of trade in intermediate goods. A significant portion of trade in intermediates between Turkey and OECD countries takes the form of intra-industry (IIT). Country-specific and industry-specific hypotheses drawn from the IIT literature are put forward to investigate the IIT in final and intermediates between Turkey and other selected OECD countries for the period of 1985-2000. To test these hypotheses, we have utilized three-way fixed effects and random effects models. The results indicate that the determinants of IIT for final goods are not much different from those for intermediate goods. Finally, the results suggest that country-specific rather than industry-specific variables are the central determinants of IIT in final and intermediate goods between Turkey and OECD.

Suggested Citation

  • Kemal Turkcan, 2005. "Determinants of Intra-Industry Trade in Final Goods and Intermediate Goods between Turkey and Selected OECD Countries," Istanbul University Econometrics and Statistics e-Journal, Department of Econometrics, Faculty of Economics, Istanbul University, vol. 1(1), pages 21-40, May.
  • Handle: RePEc:ist:ancoec:v:1:y:2005:i:1:p:21-40
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    File URL: http://eidergisi.istanbul.edu.tr/sayi1/iueis1m3.pdf
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    Cited by:

    1. Yoshinori Kurokawa, 2011. "Variety-skill complementarity: a simple resolution of the trade-wage inequality anomaly," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 46(2), pages 297-325, February.
    2. Sule Akkoyunlu & Konstantin A. Kholodilin & Boriss Siliverstovs, 2006. "The Effect of Economic Reforms of 1980s and of the Customs Union 1996 upon the Turkish Intra-Industry Trade," Discussion Papers of DIW Berlin 649, DIW Berlin, German Institute for Economic Research.
    3. Muhammad Shahbaz & Nuno Carlos Leitão & Muhammad Sabihuddin Butt, 2012. "Pakistan Intra-Industry Trade: A Panel Data Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 2(2), pages 225-232.
    4. Nuno Carlos Leitão & Horácio C. Faustino & Yushi Yoshida, 2010. "Fragmentation, Vertical Intra-Industry Trade, and Automobile components," Economics Bulletin, AccessEcon, vol. 30(2), pages 1006-1015.

    More about this item

    Keywords

    Fragmentation; Outsourcing; Final Goods; Intermediate Goods; Intra-Industry Trade; Panel Econometrics; OECD; Turkey;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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