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The Determinants of U.S. Intra-Industry Trade

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  • Keun Huh
  • F M Scherer

Abstract

Responses from the Yale University survey of 650 research and development executives were linked to U.S. trade statistics at the four-digit SIC level for the years 1965-85 to test several hypotheses concerning intra-industry trade. A new index of intra-industry trade was developed to capture both the level and balance dimensions of import and export flows. Intra-industry trade is found to be more extensive, the higher industry R&D/sales ratios were, the more important economies of learning-by-doing were, and greater the relevance of academic engineering research was, and the more niche-filling strategies were emphasized in new product development. When firms oriented their R&D efforts toward meeting the specialized demands of individual customers, intra-industry trade was lower. The highest levels of intra-industry trade were found in loosely oligopolistic industries.

Suggested Citation

  • Keun Huh & F M Scherer, 1990. "The Determinants of U.S. Intra-Industry Trade," Working Papers 90-13, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:90-13
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    File URL: https://www2.census.gov/ces/wp/1990/CES-WP-90-13.pdf
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    References listed on IDEAS

    as
    1. Grubel, Herbert G & Lloyd, P J, 1971. "The Empirical Measurement of Intra- Industry Trade," The Economic Record, The Economic Society of Australia, vol. 47(120), pages 494-517, December.
    2. Scherer, F M, 1979. "The Welfare Economics of Product Variety: An Application to the Ready-to-Eat Cereals Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 28(2), pages 113-134, December.
    3. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3, Specia), pages 783-832.
    4. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1988. "Appropriating the Returns from Industrial R&D," Cowles Foundation Discussion Papers 862, Cowles Foundation for Research in Economics, Yale University.
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