IDEAS home Printed from https://ideas.repec.org/a/taf/glecrv/v38y2009i1p63-76.html
   My bibliography  Save this article

Horizontal and Vertical Intra-industry Trade and Firm's Investment Strategies: Evidence from the IT Industry in the Asian, EU and US Markets

Author

Listed:
  • Shun-Chiao Chang

Abstract

This study investigates the features and determinants of the horizontal and vertical intra-industry trade (HIIT and VIIT, respectively) and firms' investment strategies of the information technology (IT) industry in the Asian, European Union (EU) and US markets from 1996 to 2005. The respective evolutions of the HIIT and VIIT of the IT industry indicate that HIIT has often dominated VIIT in the IT industry, which is obviously contrary to the present pattern of world trade. The empirical results further reveal the principal pattern of the IT firms' foreign direct investment strategies as facilitating the market rather than seeking efficiency in the host regions. The effect of revealed comparative advantage in relation to VIIT and HIIT demonstrates that vertical specialization is significant between Asia and the EU whereas horizontal specialization plays a key role between Asia and the US. The Asian financial crisis significantly promoted VIIT in regard to Asian IT firms in the US market. Finally, regional trade associations such as the EU and Association of South East Asian Nations (ASEAN) have strengthened the vertical specialization of EU IT firms in Asian countries.

Suggested Citation

  • Shun-Chiao Chang, 2009. "Horizontal and Vertical Intra-industry Trade and Firm's Investment Strategies: Evidence from the IT Industry in the Asian, EU and US Markets," Global Economic Review, Taylor & Francis Journals, vol. 38(1), pages 63-76.
  • Handle: RePEc:taf:glecrv:v:38:y:2009:i:1:p:63-76
    DOI: 10.1080/12265080802692696
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/12265080802692696
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maylene Y. Damoense-Azevedo & André C. Jordaan, 2012. "Factors influencing bilateral intra-industry trade in the auto industry: the case of South Africa," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 63-82.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:glecrv:v:38:y:2009:i:1:p:63-76. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/RGER20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.