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Determinants of South Africa-US Intra-Industry Trade in Services


  • Moses M. Sichei

    (Department of Economics, University of Pretoria)

  • Chris Harmse

    (Department of Economics, University of Pretoria)

  • Frans Kanfer

    (Department of Economics, University of Pretoria)


The study attempts to empirically identify factors that determine South Africa-US intra-industry trade (IIT) in selected services during the period 1994-2003. A number of hypotheses based on models of IIT for goods trade are tested. The study utilises an estimation methodology that is robust to heteroscedasticity, contemporaneous and serial correlation among errors. The empirical results, in principle, show that South Africa-US IIT in the selected services is determined by factors similar to goods-based ÒNorth-SouthÓ IIT studies. A key policy implication from the study is that South Africa should increase her IIT in unaffiliated services by minimising the differences with the US in income per capita, market size, FDI, and degree of market openness.

Suggested Citation

  • Moses M. Sichei & Chris Harmse & Frans Kanfer, 2005. "Determinants of South Africa-US Intra-Industry Trade in Services," Working Papers 200515, University of Pretoria, Department of Economics.
  • Handle: RePEc:pre:wpaper:200515

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    References listed on IDEAS

    1. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    2. Mark P. Taylor, 1995. "The Economics of Exchange Rates," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 13-47, March.
    3. Frankel, Jeffrey A, 1979. "On the Mark: A Theory of Floating Exchange Rates Based on Real Interest Differentials," American Economic Review, American Economic Association, vol. 69(4), pages 610-622, September.
    4. Rudiger Dornbusch, 1980. "Exchange Rate Economics: Where Do We Stand?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 11(1, Tenth ), pages 143-206.
    5. repec:fth:oxesaf:97-16 is not listed on IDEAS
    6. Rogoff, Kenneth, 1999. "Monetary Models of Dollar/Yen/Euro Nominal Exchange Rates: Dead or Undead?," Economic Journal, Royal Economic Society, vol. 109(459), pages 655-659, November.
    7. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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    More about this item


    Intra-industry trade; services; panel data;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation


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