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Measurement, Technological Capability, and Intra-Industry Trade: Evidence from the EU

Author

Listed:
  • M. Ali Choudhary

    (University of Surrey)

  • Paul Temple

    (University of Surrey)

  • Lei Zhao

    (University of Surrey)

Abstract

In this paper we develop models of intra-industry trade in which the technological infrastructure associated with measurement activity plays a role in determining the ability of firms to differentiate their products, making them more marketable, and hence promoting intra-industry trade. We observe that public support for the measurement infrastructure is an important element of public support for industry, while publicly available technical standards provide a significant means by which firms make use of this infrastructure. As an empirical test for the importance of the measurement infrastructure, we consider bi-lateral intra-industry trade flows between economies in the EU and find that both a measure of the cross industry importance of the measurement infrastructure – as proxied by standards - as well as the degree of investment in the ability to measure – as proxied by the use of instruments – are important correlates of intraindustry trade. The econometric analysis suggests that differences in national measurement infrastructures continue to play an important role in determining EU trade flows.

Suggested Citation

  • M. Ali Choudhary & Paul Temple & Lei Zhao, 2006. "Measurement, Technological Capability, and Intra-Industry Trade: Evidence from the EU," School of Economics Discussion Papers 1406, School of Economics, University of Surrey.
  • Handle: RePEc:sur:surrec:1406
    as

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    File URL: https://repec.som.surrey.ac.uk/2006/DP14-06.pdf
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    References listed on IDEAS

    as
    1. Colin Lawrence & Pablo T. Spiller, 1983. "Product Diversity, Economies of Scale, and International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 98(1), pages 63-83.
    2. Swann, Peter & Temple, Paul & Shurmer, Mark, 1996. "Standards and Trade Performance: The UK Experience," Economic Journal, Royal Economic Society, vol. 106(438), pages 1297-1313, September.
    3. Scott Stern & Michael E. Porter & Jeffrey L. Furman, 2000. "The Determinants of National Innovative Capacity," NBER Working Papers 7876, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Intra-industry trade; technology; product differentiation; manufacturing;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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