On Intra-Industry Trade in Intermediates

Martin Kurt Schüler
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Martin Kurt Schüler: Institut fur Europaische Wirtschaftsforschung, Bergische Universitat, Gesamtholchschule Wuppertal, Postal: Gaußstraße 20, D-42119 Grifflenberg, Wuppertal, Germany, http://www.uni-wuppertal.de/

Economia Internazionale / International Economics, 1995, vol. 48, issue 1, 67-84

Abstract: It has been claimed that vertical specialization explains substantial parts of intra-industry trade as well as its increase over time. By splitting up intra-industry trade of Spain and Turkey into different types of exchange according to the end-use of the imports and exports, the article shows that traditional two-stage patterns of vertical specialization, such as assembly activities, contribute only marginally to the observed intra-industry trade. The importance of intra-industry trade in intermediates, however, cannot be overstated. The expansion of the industrializing countries’ intra-industry trade was sustained by an increased exchange of intermediates against intermediates. But substantial doubts remain as to whether this is indeed solely due to vertical specialization.

Date: 1995
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