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Intra-Industry Trade and Revealed Comparative Advantage: An Inverted-U Relationship

Author

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  • Horácio Faustino

Abstract

This paper investigates the relationship between all types of intra-industry trade (IIT) and comparative advantage. The paper finds strong evidence of an inverted-U relationship.The results also suggest that relative autarky costs is a common determinant for any type of IIT, which contradicts the prediction made by theory for separating the determinants of horizontal and vertical IIT.

Suggested Citation

  • Horácio Faustino, 2008. "Intra-Industry Trade and Revealed Comparative Advantage: An Inverted-U Relationship," Working Papers Department of Economics 2008/03, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    • Handle: RePEc:ise:isegwp:wp32008
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    File URL: https://depeco.iseg.ulisboa.pt/wp/wp032008.pdf
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    References listed on IDEAS

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    1. P. Tharakan & Birgit Kerstens, 1995. "Does North-South horizontal intra-industry trade really exist? An analysis of the toy industry," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 131(1), pages 86-105, March.
    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;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(1), pages 77-100, March.
    3. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    4. P. K. M. Tharakan, 1989. "Bilateral Intra-Industry Trade between Countries with Different Factor Endowment Patterns," Palgrave Macmillan Books, in: P. K. M. Tharakan & Jacob Kol (ed.), Intra-Industry Trade, chapter 5, pages 69-91, Palgrave Macmillan.
    5. David Greenaway & Robert Hine & Chris Milner & Robert Elliott, 1994. "Adjustment and the measurement of marginal intra-industry trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(2), pages 418-427, June.
    6. Lancaster, Kelvin, 1980. "Intra-industry trade under perfect monopolistic competition," Journal of International Economics, Elsevier, vol. 10(2), pages 151-175, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Vlatka Bilas & Mile Bosnjak, 2015. "Revealed Comparative Advantage And Merchandise Exports: The Case Of Merchandise Trade Between Croatia And The Rest Of The European Union Member Countries," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 24(1), pages 29-47, june.
    2. Fithra Faisal Hastiadi, 2012. "The Determinants of China-Japan-Koreas Vertical Intra Industry Trade to ASEAN4 countries," Working Papers in Economics and Business 201205, Faculty of Economics and Business, University of Indonesia, revised May 2012.
    3. Mamajanova, Tuygunoy & Otamurodov, Shavkat, 2016. "Uzbekistan 'S Agricultural Products Comparative Advantages In Russian Market," Samarkand Conference 2016, November 2-4, Samarkand, Uzbekistan 250066, Institute of Agricultural Development in Transition Economies (IAMO).
    4. Fithra Faisal Hastiadi, 2011. "East Asian Regionalism: The Need For Asean+3 Fta," Journal of Global Business and Economics, Global Research Agency, vol. 3(1), pages 31-56, July.
    5. Martha Beatriz Flores Romero & Laura Ponce De León Núñez, 2019. "Competitividad de las Frutillas en México, a través de la Ventaja Comparativa Revelada," Revista de la Facultad de Contaduría y Ciencias Administrativas, Universidad Michoacana de San Nicolás de Hidalgo, Facultad de Contaduría y Ciencias Administrativas, vol. 4(8), pages 96-105, December.

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    More about this item

    Keywords

    intra-industry trade; horizontal intra-industry trade; vertical intra-industry trade; comparative advantage.;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • C0 - Mathematical and Quantitative Methods - - General
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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