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Journal of Economic Integration 2000 June;15(2) :260-280.
Economic Geography, Comparative Advantage and Trade within Industries: Evidence from the OECD

David Greenaway Johan Torstensson 

Centre for Research in Globalisation and Labour Markets University of Nottingham
Lund University, FIEF, Stockholm and CEPR
Copyright ©2000 Journal of Economic Integration
A large share of world trade, especially among the OECD countries, is two-way trade within industries, so called intra-industry trade. Despite this, few attempts have been made to examine why countries export some products with in industries, whereas they import others. We examine this issue, by focusing on the shares of IIT that are vertical and horizontal and by examining price dispersion. The regression results suggest that an abundant human capital endowment as well as a large domestic market increases the quality of OECD-countries' manufacturing exports, thus offering support for comparative advantage models as well as newer geography models. (JEL Classifications: F12, F13)
1. Torstensson, J. [1996b], "Can Factor Proportions Explain Vertical IntraIndustry Trade?," Applied Economics Letters 3; pp. 307-310.
2. Venables, A.J. [1987], "Trade and Trade Policy with Differentiated Products: A Chamberlinian-Ricardian Model," Economic Journal 97; pp. 700-717.
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