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Country-specific factors and the pattern of intra-industry trade in China's manufacturing

  • Zhaoyong Zhang

    (NUCB and Edith Cowan University, Australia)

  •  LI Chuan

    (Jinan Science & Technology Information Research Institute, Shandong, China)

Over the past few decades there have been extensive empirical and theoretical studies of the determination of intra-industry trade (IIT), but mostly for the industrialized countries. This paper aims to assess the trends and pattern of intra-industry trade and structural adjustment in China's manufacturing sector associated with its trade liberalization using data spanning from 1990 to 2000. In particular, we distinguish intra-industry trade as either horizontally or vertically differentiated, and examine how the various country-specific factors affect the intensity of China's horizontally and vertically differentiated intra-industry trade with its major trading partners, and how trade liberalization changes the pattern of China's IIT and integration with the East Asian region. These issues have important policy implications for product differentiation strategy and labour adjustment. Copyright © 2006 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/jid.1288
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Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 18 (2006)
Issue (Month): 8 ()
Pages: 1137-1149

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Handle: RePEc:wly:jintdv:v:18:y:2006:i:8:p:1137-1149
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  1. James R. Markusen & Keith E. Maskus, 2001. "A Unified Approach to Intra-Industry Trade and Direct Foreign Investment," NBER Working Papers 8335, National Bureau of Economic Research, Inc.
  2. David Greenaway & Robert Hine & Chris Milner, 1994. "Country-specific factors and the pattern of horizontal and vertical intra-industry trade in the UK," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 130(1), pages 77-100, March.
  3. Balassa, Bela, 1986. "Intra-Industry specialization : A cross-country analysis," European Economic Review, Elsevier, vol. 30(1), pages 27-42, February.
  4. Hummels, David & Levinsohn, James, 1995. "Monopolistic Competition and International Trade: Reconsidering the Evidence," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 799-836, August.
  5. Flam, Harry & Helpman, Elhanan, 1987. "Vertical Product Differentiation and North-South Trade," American Economic Review, American Economic Association, vol. 77(5), pages 810-22, December.
  6. Zhaoyong Zhang, 2002. "Productivity And Economic Growth: An Empirical Assessment Of The Contribution Of Fdi To The Chinese Economy," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 27(2), pages 81-94, December.
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