Country Specific Determinants of Developing Countries’ Intra Industry Trade Types

Document Type : Research Paper

Author

Ph.D

Abstract

The purpose of this paper is to estimate and study country specific determinants of some selected developing countries’ intra industry trade (IIT) types. For this, these counties’ foreign trade data was collected, processed, and then used to estimate their index and determinants of IIT types. Pooling data then is used to estimate country determinants of IIT types by panel method. Results indicate that development stage, market size, Linder variable, economic integration, tariff similarity, research and development (R&D) expenditures, multinational enterprises, tariff barriers, product differentiation and cultural similarity are among the HIIT determinants of developing countries. Furthermore, development stage, human capital, market size, economic integration, tariff similarity, research and development (R&D) expenditures, multinational enterprises, tariff barriers, product differentiation and common border, income distribution situation and geographical distance are among the VIIT determinants of developing countries. To sum up, it seems that country specific characteristics are important for upgrading IIT. This implies that emphasis on country characteristics may increase trade volume of developing countries, specially Iran. Thus, it is suggested that country specific factors including product differentiation, FDI, economic integration and trade liberalization, should be emphasized.

Keywords

References

Abd-el Rahman, Kamal, (1991); "Firms' Competitive and National Comparative Advantages as Joint Determinants of Trade Composition", Weltwirtschaftliches Archiv, 127, pp. 83-97.
Aturupane, Chonira, Simeon Djankov and Bernard Hoekman (1999); "Horizontal and Vertical Intra-Industry Trade between Eastern Europe and the European Union", Weltwirtschaftliches Archiv, 135 (1), pp. 62-81.
Bergstrand, J.H. (1990); "The Heckscher-Ohlin-Samuelson Model, the Linder Hypothesis and the Determinants of Bilateral Intra-industry Trade", Economic Journal, 100, pp. 1216-1229.
Brander, James A. and Krugman, Paul R., (1983); "A Reciprocal Dumping Model of International Trade", Journal International Economics, 15, pp. 313-321.
Brander, James A. (1981); "Intra-industry Trade in Identical Commodities", Journal International Economics, 11, pp. 1-14.
Davis Donald R., (1995); "Intra-industry Trade: A Heckscher-Ohlin-Ricardo Approach", Journal of International Economics, 39, pp. 201-226.
Dixit, A. and Stiglitz, J. (1977); "Monopolistic Competition and Optimum Product Diversity", American Economic Review, 67, pp. 297-308.
Falvey, Rodney E. (1981); "Commercial Policy and Intra-industry Trade", Journal of International Economics, 11, pp. 495-511.
Falvey, R. E. and Kierzkowski, H. (1987); "Product Quality, Intra-Industry Trade and (Im)perfect Competition", in Kierzkowski, H (ed), Protection and Competition in International Trade: Essays in honour of W. M. Corden, Basil Blackwell, Oxford.
Flam, H. & Helpman, E. (1987); "Vertical Product Differentiation and North-South Trade", American Economic Review, 77, pp. 810-822.
Gabszewicz, J., Shaked, A., and Sutton, J. (1981); "International Trade in Differentiated Products", International Economic Review, 22 (3), pp. 527-534.
Greenaway, D., R. Hine, and C. Milner (1995); "Vertical and Horizontal Intra-Industry Trade: A Cross Industry Analysis for the United Kingdom", Economic Journal, 105, pp. 1505-1518.
Greenaway, D., R. Hine, and C. Milner (1994); "Country-Specific Factors and the Pattern of Horizontal and Vertical Intra-Industry Trade in the UK", Weltwirtschaftliches Archiv, 130 (1), pp. 77-100.
Grubel, H.G. and Lloyd, P.J. (1975); Intra-industry Trade: The Theory and Measurement of International Trade in Differentiated Products, NewYork: John Wiley.
Hansson, P. (1994); "Product Quality and Vertical Product Differentiation as Determinants of Intra-Industry Trade in Swedish Manufacturing", Trade Union Institute for Economic Research, Working Paper.
Helpman, Elhanan (1981); "International Trade in the Presence Product Differentiation, Economies of Scale and Monopolistic Competition", Journal of International Economics, 11, pp. 305-340.
Hofstede, G. (1980); Cultures Consequences: International Differences in Work-related Values, Beverly Hills: Sage.
Hu, Xiaoling and Yue Ma (1999); "International Intra-Industry Trade of China", Weltwirtschaftliches Archiv, 135 (1), pp. 82-101.
Kenen, P.B. (1994); The International Economics, (3 rd Edition), NewYork: Cambridge University Press.
Kogut, B., and H. Singh. (1988); "The Effect of National Culture on the Choice of Entry Mode", Journal of International Business Studies, 19 (3), pp. 411-432.
Krugman, P. (1979); "Increasing Returns, Monopolistic Competition, and International Trade", Journal of International Economics, 9 (4), pp. 469-479.
Krugman, P. (1981); "Intra-Industry Specialization and the Gains From Trade", Journal of Political Economy, 89 (5), pp. 959-973.
Krugman, P. (1980); "Scale Economies, Product Differentiation and the Pattern of Trade", American Economic Review, 70 (5), pp. 950-959.
Lancaster, Kelvin (1980); "Intra-industry Trade under Perfect Monopolistic Competition", Journal of International Economics, 10, pp. 151-175.
Linder, S.B. (1961); An Essay in Trade and Transformation, NewYork: John Wiley & Sons Ltd.
Loertscher, Rudolf and Wolter, Frank (1980); "Determinants of Intra-industry Trade: Among Countries and Across Industries", Weltwirtschaftliches Archiv, 116, pp. 280-293.
Stone, J.A. and Lee, H.H. (1995); "Determinants of Intra-industry Trade: A Longitudinal, Cross-country Analysis", Weltwirtschaftliches Archiv, 131 (1), pp. 67-85.
Zhang, Jianhong, Witteloostuijn, Arjen Van, and Chaohong, Zhou, (2005); "Chinese Bilateral Intra-Industry Trade: A Panel Data Study for 50 Countries in the 1992-2001 Period", Review of World Economics, 141 (3).
 
 
Iranian Journal of Trade Studies
Volume 12, Issue 45 - Serial Number 45
December 2022
Pages 221-244

Files

History

  • Receive Date: 28 December 2022
  • Accept Date: 28 December 2022

Share

How to cite

Statistics