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Intra-industry specialization : a cross country analysis (English)

This paper tests various hypotheses as to the determinants of intra-industry trade in thirty-eight developed and developing countries exporting manufactured goods. The econometric estimates for the entire group of countries show that the extent of intra-industry trade increases with the level of economic development (GNP per head), the size of domestic markets (GNP), and the openness of national economies. The existence of trading partners with common borders and geographical proximity further contributes to intra-industry trade. These hypotheses have also been confirmed for the developing country group, and while similarities in regard to trade orientation and the existence of border trade, as well as intercorrelation between the gross national product and per capita GNP, have reduced the statistical significance of the regression coefficients for these variables for the developed country group, this equation also has a high explanatory power.

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Citation

Balassa,Bela

Intra-industry specialization : a cross country analysis (English). World Bank reprint series ; no. REP 388 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/352471467980483585/Intra-industry-specialization-a-cross-country-analysis