The Nature and Causes of Intra-Industry Trade: Back to the Comparative Advantage Explanation? The Case of Spain

Carmela Martín and Jose Vicente Blanes

No 1, European Economy Group Working Papers from European Economy Group

Abstract: The aim of this paper is to contribute empirically to the knowledge of the nature and causes of intra-industry trade (IIT), distinguishing between vertical and horizontal IIT. To this end, we estimate a more general empirical model than those used in previous studies, by introducing simultaneously both national and industry-specific variables which include measures for human and technological capital endowments. The results show that vertical IIT is positively related with industry technological intensity and differences in human and technological capital endowments between countries. On the other hand, horizontal IIT is explained by the traditional monopolistic competition model.

Keywords: Intra-Industry; Trade (search for similar items in EconPapers)
Date: 1999
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Journal Article: The nature and causes of intra-industry trade: Back to the comparative advantage explanation? The case of Spain (2000)
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