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Regionalization And Intra-Industry Trade. An Analysis Of Automobile Industry Trade In Nafta

Author

Listed:
  • Sylvie MONTOUT

    (Panthéon-Sorbonne University, TEAM University of Paris 1-CNRS)

  • Jean-Louis MUCCHIELLI

    (University Panthéon-Sorbonne)

  • Soledad ZIGNAGO

    (CEPII and Panthéon-Sorbonne University, TEAM University of Paris 1-CNRS)

Abstract

As was shown in some previous studies, the creation of the North American Free Trade American (NAFTA) has significantly increased trade and investment flows between member countries. Consequently, it seems appropriate to analyze the incidences of the free trade agreement on the nature of trade. In this paper, we study the intra-industry trade in the automobile industry within the NAFTA area. Our results highlight an increase in intra-industry trade since the beginning of the 1990s. The importance of intra-industry trade is evaluated with the Grubel and Lloyd indicator (1975). For final and intermediate goods, we distinguish those which are horizontally differentiated in quality (differences in unit values) from those in varieties (similar unit values). In NAFTA, intra- industry trade exists in most sectors and in two bilateral relations (United States-Canada and United States-Mexico). Therefore, we analyze the nature of that increase and more precisely, the determinants of intra-industry trade in this industry. Through a gravity model integrating some country-specific and sector variables, we found that economic distance and market size have a predominant influence on horizontal intra-industry trade. In this way, we also confirm the significant role of regional integration on the intensity of intra-industry trade.

Suggested Citation

  • Sylvie MONTOUT & Jean-Louis MUCCHIELLI & Soledad ZIGNAGO, 2002. "Regionalization And Intra-Industry Trade. An Analysis Of Automobile Industry Trade In Nafta," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 16, pages 137-159.
  • Handle: RePEc:tou:journl:v:16:y:2002:p:137-159
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    References listed on IDEAS

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    Cited by:

    1. Kemal Türkcan, 2009. "Vertical Intra-Industry Trade: An Empirical Examination of the Austria’s Auto-Parts Industry," FIW Working Paper series 030, FIW.
    2. Pittiglio, Rosanna, 2009. "The Intra-industry Trade for a Highincome Country: New Empirical Evidence for Italy," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 62(2), pages 233-254.
    3. Kemal Türkcan, 2011. "Vertical Intra-Industry Trade and Product Fragmentation in the Auto-Parts Industry," Journal of Industry, Competition and Trade, Springer, vol. 11(2), pages 149-186, June.
    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.
    5. 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.

    More about this item

    Keywords

    AUTOMOBILE INDUSTRY; INTRA-INDUSTRY TRADE; REGIONAL INTEGRATION;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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