On the stability of intra-industry trade

Kazunobu Hayakawa, Toshihiro Okubo and Ito Tadashi

No 542, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This paper presents the novel finding that two-way intra-industry trade (IIT) in product–country pairs is very unstable over time by using disaggregated trade data of OECD countries. Many products frequently switch among two-way, one-way and zero trade over time. To measure the stability of two-way trade, we propose a measure that we refer to as the "IIT stability index". Our estimation results using the proposed measure show that two-way trade involving markets of different sizes and long distance are likely to be unstable. In addition, primary products are more unstable than manufactured products.

Keywords: International trade; Industry; Two-way trade; Intra-industry trade; Stability (search for similar items in EconPapers)
JEL-codes: F10 F14 (search for similar items in EconPapers)
Date: 2015-10-01
New Economics Papers: this item is included in nep-int
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 542. 2015-10-01

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Journal Article: On the stability of intra-industry trade (2017)
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