Horizontal and Vertical Differentiation: Approaching Endogenous Measurement in Intra-industry Trade

Sourish Dutta ()

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: Studying intra-industry trade involves theoretical explanations and empirical methods to measure the phenomenon. Indicators have been developed to measure the intensity of intra-industry trade, leading to theoretical models explaining its determinants. It is essential to distinguish between horizontal and vertical differentiation in empirical analyses. The determinants and consequences of intra-industry trade depend on whether the traded products differ in quality. A method for distinguishing between vertical and horizontal differentiation involves comparing exports' unit value to imports for each industry's intra-industry trade. This approach has limitations, leading to the need for an alternative method.

Keywords: Intra-industry trade; Vertical intra-industry trade; Horizontal intra-industry trade; Value Added (search for similar items in EconPapers)
JEL-codes: F10 F11 F12 F14 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-com and nep-int
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Working Paper: Horizontal and Vertical Differentiation: Approaching Endogenous Measurement in Intra-industry Trade (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:275680

DOI: 10.33774/coe-2023-mmlq4

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