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On the stability of intra-industry trade

Kazunobu Hayakawa (), Tadashi Ito and Toshihiro Okubo ()

Journal of the Japanese and International Economies, 2017, vol. 45, issue C, 1-12

Abstract: This paper presents the novel finding that, in contrast to what the previous literature has shown, two-way intra-industry trade (IIT) in product–country pairs, when looked from a dynamic perspective, is very unstable 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 and primary products are more unstable than manufactured products.

Keywords: Two-way trade; Intra-industry trade; Stability (search for similar items in EconPapers)
JEL-codes: F10 F14 (search for similar items in EconPapers)
Date: 2017
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Working Paper: On the stability of intra-industry trade (2015) Downloads
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