Determinants of Intraindustry Trade Between the United States and Industrial Nations

Abstract

This paper investigates determinants of intraindustry trade between the United States and twenty-two industrial nations. Included here are country-level characteristics suggested by modern models of monopolistic competition and trade and industry-level variables relating to imperfect competition, scale economies, and product differentiation. Country-level determinants of intraindustry trade include relative factor endowment differences, relative country size differences, distance, trade orientation, and the trade balance. Measures of factor intensity, scale economies, market structure, and product differentiation are included as country-level variables. Findings generally support predictions of modern trade theories. [F1]

The Asymmetric Effect of Endowments on Vertical Intra‐industrial Trade

“…However, only a few studies have analysed the determinants of intra‐industry trade among high‐income and emerging countries. Ray (1991), Aturupane et al (1999), Clark and Stanley (1999), Kim and Keun‐Yeob (2001), Crespo and Fontoura (2004) and Milgram‐Baleix and Moro‐Egido (2005) are examples of this type of study. However, due to the difficulty of gathering data for these countries, these studies are subjected to several limitations: the period of study is old in order to use proxies for endowments from the Penn World Tables and/or they do not consider the different nature of intra‐industry trade and/or use a very limited set of explanatory variables.…”

“…3 3 Martín and Orts (2001, 2002) also used the same technique. Alternatively, Clark and Stanley (1999) used the Tobit specification. …”

DETERMINANTS OF SOUTH AFRICA‐US INTRA‐INDUSTRY TRADE IN SERVICES: A WILD BOOTSTRAP DYNAMIC PANEL DATA ANALYSIS1

“…The novelty of this paper is in attempting to find the empirical determinants of South Africa–US unaffiliated 4 IIT in selected services during the period 1994‐2002 utilising wild bootstrapping in the context of panel data. The paper is in the spirit of other research focusing on “North‐South” trade in services (Sapir, 1985; Clark and Stanley, 1999; Kunin and Zigic, 2003).…”

Intra‐industry Trade, Reconsidered: The Role of Technology Transfer and Foreign Direct Investment

“…First, it remains unclear whether the Helpman and Krugman (1985) (HK model) still has explanatory power in IIT econometric analysis. For example, several authors have noted an increase in IIT between OECD and non‐OECD countries (Clark and Stanley, 1999; Nilsson, 1999; Lee, 1989; and Tharakan and Kerstens, 1995). 3 This increase cannot be simply explained by the HK model or the Heckscher‐Ohlin (HO) theorem.…”

“…Clark and Stanley (1999) found evidence of increased IIT in the United States with developing countries. Also, Nilsson (1999)'s evidence studied the EU IIT with small developing countries.…”