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Demand patterns and vertical intra-industry trade with special reference to North-South trade

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  • Joakim Gullstrand

Abstract

Demand patterns have been considered important driving forces of intra-industry trade (IIT) ever since the emergence of IIT literature. The distribution of income within countries and per capita income differences between countries are regarded as major explanatory factors behind vertical IIT. This paper focuses on North-South trade, and we are particularly interested in the role of income distribution and per capita income as demand-side determinants of vertical IIT. We test hypotheses on differences in income distribution, differences in per capita income, and average market size in two different empirical approaches; an economy-wide, and a multi-industry approach. The results show evidence of the role of income distribution and per capita income, that there is an important interaction between these two variables, and that the average market size matters.

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  • Joakim Gullstrand, 2001. "Demand patterns and vertical intra-industry trade with special reference to North-South trade," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 11(4), pages 429-455.
    • Handle: RePEc:taf:jitecd:v:11:y:2001:i:4:p:429-455
    DOI: 10.1080/0963819022000014249
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    Cited by:

    1. Valerija Botrić, 2013. "Determinants of Intra-industry Trade between Western Balkans and EU-15: Evidence from Bilateral Data," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 6(2), pages 7-23, September.
    2. Bel Hadj Tarek, 2012. "Product Differentiation and Intra-Industrial Trade: Quantitative Assessment in the Case of Tunisia," Journal of Economics and Behavioral Studies, AMH International, vol. 4(10), pages 570-587.
    3. Božić, Dragica & Nikolić, Marija M., 2013. "Regional Analysis of Agricultural and Food Trade of Serbia," 135th Seminar, August 28-30, 2013, Belgrade, Serbia 160374, European Association of Agricultural Economists.
    4. Lionel Fontagné & Michael Freudenberg & Guillaume Gaulier, 2005. "Disentangling Horizontal and Vertical Intra-Industry Trade," Working Papers 2005-10, CEPII research center.
    5. BELLINO, Antonella & CELI, Giuseppe, 2016. "The Migration-Trade Nexus in the Presence of Vertical and Horizontal Product Differentiation," CELPE Discussion Papers 137, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.
    6. Lars Jensen & Teit Lüthje, 2009. "Driving forces of vertical intra-industry trade in Europe 1996–2005," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(3), pages 469-488, October.
    7. Imre Ferto & Károly Attila Soós, 2012. "Controversial issues in factors determining intra-industry trade," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 132-148.

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